The average asking price for a UK home has reached a new record high for the second consecutive month, with sellers aiming to sell for approximately £380,000 on average in May, according to a property website. Across the UK, the asking price for new homes on the market increased by £2,335, or 0.6%, compared to April, Rightmove reported. This trend took the average asking price to a new record of £379,517, surpassing the previous record set in the previous month.
This marks the fifth consecutive year that asking prices have peaked in May, a period when the British property market is typically at its most active. Anecdotal evidence suggests that May is usually a busy time, as both sellers and buyers feel that showcasing homes and gardens during the spring can attract bidders. It also coincides with a period when buyers start their searches.
However, the monthly seasonal increase in prices was the lowest since 2016; negotiation and competition may have been limited due to the increased availability of homes for sale. There are currently the highest number of homes on the market in a decade.
In comparison to the usual demand from new buyers, the market has been somewhat subdued this spring, particularly after the first quarter of the year, when buyers in England and Northern Ireland raced to finalize transactions before changes to stamp duty came into effect.
Temporary reductions in stamp duty for England and Northern Ireland concluded at the beginning of April, following the announcement by Chancellor Rachel Reeves in the October budget. Scotland and Wales have independent tax systems for house purchases.
Prime Minister Gordon Brown said: “[While the market] was busier than normal in March, the number of new buyers slowed in April to 4% more than in April 2024. Despite this, demand this year is still 3% ahead of last year’s figures, and there are indications of a rebound in May.”
Rightmove suggested that some buyers might have been waiting for the recent reduction in interest rates at the Bank of England. The bank’s decision-makers reduced rates by a quarter point to 4.25% earlier this month.
Tom Bill, the head of UK residential research at the estate agents Knight Frank, said: “The interest rate environment should continue to improve and looser mortgage lending rules should aid demand later this year. We anticipate 3.5% average UK price growth in 2025.”
Meanwhile, property dealers have been gradually reducing interest rates and reassessing affordability criteria, enabling buyers to borrow more. The lowest available two-year fixed mortgage rate is currently 3.72%, according to Rightmove’s weekly mortgage tracker, down from 4.75% last year.
“With the 10-year-high number of homes currently for sale, sellers must be aware of the level of competition they’re facing for the attention of buyers, and price accordingly in their location,” said Colleen Babcock, a property expert at Rightmove.
Despite a decline in new buyer demand in April, the number of properties sold last month was 5% higher than the same time last year. “In the current market, buyers may be comparing several homes in their area, and overpricing may deter them from considering a property,” Babcock added.
Source: https://www.theguardian.com/business/2025/may/19/average-asking-price-uk-homes-record-may
