This was a 0.8% – or £2,807 – increase in the average asking price since the previous month, according to the Rightmove house price index.
The firm said May was usually a strong month for price growth, and asking price records had been seen in May in 12 of the last 22 years.
Compared to the same period last year, average asking prices were up by 0.6%.
The surge was mostly driven by larger properties, as top-of-the-ladder types of homes saw a 1.3% rise in average asking prices since 2023 to £693,791. Compared to April, this was a 1.6% jump.
Rightmove attributed this to homemovers who were going ahead with plans after putting them off last year when mortgage rates were higher.
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The average asking price for homes typically targeted to first-time buyers increased 0.7% annually to £228,003. This was also a 0.4% monthly uptick.
For second steppers, the average asking price of a home rose 0.5% to £343,268 annually. This was a 0.2% rise on April’s average.
Tim Bannister, director of property science at Rightmove, said: “Some predicted that property prices would suffer sharp falls and take a while to recover following the Bank of England increasing the base rate up to 5.25%, where it has remained since August 2023. However, the momentum of the spring selling season has exerted enough upwards price pressure to reach a new record asking price.
“The top-of-the-ladder sector is still leading the way, while from a regional perspective, the North East, with the cheapest average prices in Great Britain, has seen the strongest price growth. However, it’s important to remember that prices overall are still only 0.6% ahead of this time last year. The market remains price-sensitive, and with prices reaching new records in the majority of regions and mortgage rates remaining elevated, affordability for many homebuyers is still stretched.”
Increased sales activity
The Rightmove house price index also showed there was a 17% rise in the number of agreed sales, which was outstripping the 12% increase in new sellers coming to market.
Again, Rightmove said this was led by activity at the top of the housing ladder, primarily four-bedroom detached homes and five-bedroom-plus properties.
The firm said factors such as a lack of available homes and climbing mortgage rates made buyers pause on moving plans, but settled rates were bringing them back to the market.
Nick Leeming, chair of Jackson-Stops, said: “Seasonal demand and an uptick in listings has helped to boost spring transactions, although some may still be waiting in the wings for an elusive interest rate drop to ease affordability constraints. With inflation falling, there is hope the wait may come to an end soon, as the Bank of England may look for an economic boost before the general election.
“The message here is that lifestyle changes and supply are still the dominating market forces for most, anchoring house prices for the foreseeable future to provide much-needed stability and assurance. The more positive macroeconomic outlook in recent weeks has even led some to revise house price forecasts for the year upwards from decline to growth; consumer confidence that will likely trickle into a busy summer ahead.”
Matt Thompson, head of sales at Chestertons, said: “Some house hunters waited for the Bank of England to cut interest rates earlier this month, but as this did not happen, buyers quickly resumed their search.
“As an increasing number of lenders are now cutting mortgage rates, buyers feel slightly more confident about their financing options. We expect this shift in the market to fuel buyer demand this summer – particularly in London, where the volume of buyers still outweighs the number of available properties.”
Lengthy exchange process
Rightmove said the time to complete a house sale was still a “challenge”, with the average time now taking five months, or 154 days, between agreeing a sale and the legal completion.
It said it was taking more than seven months on average from a seller coming to market to completing their move, meaning anyone who wanted to move by Christmas would need to put their home up for sale now.
Rightmove referred to the current parliamentary inquiry into improving the house buying and selling process.
The firm said one way to improve this could be to price a property competitively from the start to avoid asking price reductions.
Its analysis showed that a property took an average of 32 days to reach the agreed sale stage when priced correctly in the first place, shorter than the 112-day span for a home that needed a price reduction before finding a buyer.
Dan Salmons, CEO of Coadjute, said: “Whilst long completion times have been a fact of life for years, it remains painful for homemovers, and we see it as something technology can and will solve. At the heart of it, the delays are caused by problems of communication, and the difficulty in rapidly obtaining accurate data in a secure way.
“There’s certainly a lot of progress that can be made, and whilst there’s no silver bullet, we hope to eventually see some dramatic improvements in the current time to complete.”
