The latest data shows that mortgage interest rates have been relatively unchanged in recent weeks despite a slight increase in swap rates.

However, Savills says lower rates will be needed to bring more demand back to the market.

The Office for National Statistics (ONS) inflation data for April was higher than many economists expected, at 2.3%.

This has delayed expectations of the first base rate cut by the Bank of England (BoE).

Oxford Economics predicts this will now happen in August, instead of the originally expected month of June, with just one additional cut in 2024.

The latest Nationwide house price index showed that house prices grew by 0.4% in May, taking annual growth to 1.3%.

With the return to monthly growth, following two months of price falls, Savills suggests the market has been resilient despite the ongoing high cost of borrowing.

Last month, current UK Prime Minister Rishi Sunak announced there will be a general election on 4 July. As it stands, there are no emerging policies from the major parties that are likely to disrupt the mainstream housing market.

A recent report from eXp UK found that house prices have climbed by an average of 5.4% in every year that followed a general election since the 1980s.

Data from the report suggests that July’s election is unlikely to slow the positive property market momentum that has been building in recent months.

Elsewhere, the Savills report found that supply has increase as sellers return to the market, but demand held steady.

The number of surveyors reporting increased supply rose to the highest level since September 2020, according to the April RICS survey.

Zoopla has also reported the highest number of homes for sale in the last eight years. Savills notes that this will limit upward pressure on house prices until demand strengthens.

Sales activity is now close to pre-pandemic levels. Mortgage approvals stayed level in April at 94% of their 2017 to 2019 average, according to the Bank of England. The boost to agreed sales at the start of 2024 is now showing in the number of completed transactions, which grew to 92% of 2017 to 2019 levels, HMRC revealed.

This is likely to further improve as sales agreed in May were 10% above their 2017 to 2019 average, according to TwentyCI data.