The United Kingdom housing prices increased for a fifth consecutive May, reaching a new record since the vendors ran to list the properties before the new tok effect of the lower bell tax threshold.
According to the latest Rightmove figures, the new average sales prices increased by £ 2,335 in May, a monthly increase of 0.6%, bringing the national average to a record of £ 379,517. However, it was the smallest that can increase since 2016, which reflects a cooler market that favors buyers.
Rightmove said the increase was largely driven by a 14% increase in new properties lists, the highest level in a decade. The increase in supply has intensive competition among sellers, while the demand for buyers has softened due to higher mortgage rates, global commercial uncertainty and recently changes to tax thresholds.
“The price increase of this month is the lowest in May for nine years is a sign of a market that favors buyers,” said Colleen Babcock, expert in Rightmove properties. “Sellers must be aware of the level of competition they face for the attention of buyers.”
Cautious buyers in the midst of economic uncertainty
Despite the general increase in list prices, the demand fell in April after the reduction of bell tax thresholds in England and Northern Ireland. According to the whole country, the average housing prices fell 0.6% last month.
The uncertainty surrounding President Trump’s tariff policies, as well as the anticipation of an interest rate cut of the Bank of England, contributed to the activity of the moderate market. However, May has seen that the demand begins to recover, the assistant for the reduction of the bank rate to 4.25%, which in turn has helped boost the average fixed mortgage rate of two years to 3.72%, from 4.75%a year ago.
The United Kingdom real estate market has proven remarkable, despite the fears of recession and a cycle of several years of increasing interest rates. According to the National Statistics Office, housing prices increased 5.4% year -on -year in February to an average of £ 268,000.
Knight Frank forecasts a 3.5% increase in housing prices by 2025, backed by the fall of interest rates and gradually improving the real income of households.
“We are seeing more homes reaching the market because the owners leave, the housewasters trying to overcome the changes of bell taxes and the plans to review the suppliers delayed by the political uncertainty last year,” said Tom Bill, head of the United Kingdom Residential Residential.
Although the price impulse remains positive, the United Kingdom housing supply pipe is under pressure, with the 300,000 houses of the government per year in doubt.
Hampton reports that sales outside the plan fell to 31% in 2024, the lowest since 2012, and well below 49% peak observed in 2016.
“Housing builders trust advanced funds to progress on the site,” said David Fell, Hamptons analyst. “The fall in demand outside plan, especially small owners, threatens future delivery and puts at risk the ambitions for the construction of work housing.”
As the market enters the summer months, buyers and vendors equally will observe closely the trends of interest rates, policy developments and inflation to measure how long this latest price execution can continue.
Jamie Young
Jamie is a senior reporter of Business Matters, who brings more than a decade of experience in commercial reports of the United Kingdom. Jamie has a business administration title and participates regularly in conferences and industry workshops. When he does not inform about the last business development, Jamie is passionate about the mentoring of promising journalists and businessmen to inspire the next generation of business leaders.
