UK House Prices Reach a New High

The UK housing market asking prices have reached a new record high, reports Rightmove. The average property price surged by 1.8% (£6,647) this month, reaching a new milestone of £372,894. 

This increase is the largest of the year and surpasses the typical May rise. According to Rightmove's data, agreed sales figures are only 3% lower than the pre-pandemic levels of 2019. The average discount from the asking price to the sale price has stabilized at 3.1%, indicating homebuyers' confidence in the market's future. 

While price confidence is more evident in the lower and middle market segments, there are signs of over-optimism among luxury property buyers. Demand for high-end properties is 1% lower than in 2019, while second-stepper properties show a 3% increase, and first-time buyer properties demonstrate a 6% rise compared to 2019. 

Furthermore, despite the Bank of England raising its base rate, average mortgage rates remain steady. A five-year fixed mortgage with a 15% deposit now stands at 4.56% compared to 5.89% in October last year. Tim Bannister from Rightmove suggests that the surge in seller asking prices reflects growing seller confidence, potentially driven by a more favourable market outlook and steady mortgage rates. However, Bannister advises sellers to price their properties realistically to avoid reducing prices later and jeopardizing the chances of a sale.