On an annual basis house prices rose for a sixth consecutive month, up by 1.5% vs 1.1% in April. The average property price now stands at £288,688. This is according to the latest Halifax House Price Index, which also reveals that UK house prices were largely static in May, edging down slightly by -0.1% or around £170 in cash terms.
Commenting on the latest figures Halifax head of mortgages Amanda Bryden said: “Market activity remained resilient throughout the spring months, supported by strong nominal wage growth and some evidence of an improvement in confidence about the economic outlook. This has been reflected in a broadly stable picture in terms of property price movements, with the average cost of a property little changed over the last three months.
She added: “A period of relative stability in both house prices and interest rates should give a degree of confidence to both buyers and sellers. While homebuyers and those remortgaging will continue to respond to changes in borrowing costs, set against a backdrop of a limited supply of available properties, the market is unlikely to see huge fluctuations in the near term.”
Foxtons chief executive Guy Gittins pointed to a static start to the year, month to month, however he highlighted a considerable improvement in selling activity this year, which is a complete shift from 2023.
“ We are seeing higher levels of new buyers coming into the market and offers being made, with around 25% more sales being agreed year to date than we saw in the same period last year, in which sales were heavily subdued due to the interest rate shock that came before it. Spring has definitely sprung this year and we’re seeing a lot more activity and positivity from both sellers and buyers, knowing that they feel a little bit more secure.”
Guild of Property Professionals chief executive Iain McKenzie echoed many of these comments. “After seeing some volatility in house prices in the spring, it is reassuring to buyers and sellers alike that stability is returning to the market.
“There is now pent-up demand, particularly among first-time buyers who might be sitting on a deposit and waiting for interest rates to fall.
He added: “Our members are seeing this on the ground, with transactions at their highest levels since early 2023. There has since been a rise in the number of properties on the market, and it’s likely that some buyers had been waiting for better mortgage offers to arrive.
“This elevated supply of housing has provided more choice for buyers, potentially lessening the urgency to buy quickly. Estate agents are reporting a more balanced market where buyers have more negotiating power.”
Fine & Country managing director Nicky Stevenson said the annual rise in house prices were a positive sign of slowly-improving buyer demand as people started to feel more financially secure. She added that for sellers, increased demand for homes meant that they could hold firm on their asking prices. “While this might not be welcome news for buyers – especially first-timers – an anticipated interest rate cut this summer could provide some relief in the coming months.
“All eyes are on the Bank of England to finally drop the base rate from its current 5.25%, where it has remained since September.”
