Average asking prices rose by more than £4,200 (1.1%) in the month to April thanks to growth in activity at the top end of the market, Rightmove’s latest house price index shows.
The average price of £372,324 meant the annual rate of house price growth hit 1.7%. It means the average amount sellers are seeking for their homes is sitting just £570 below the record peak the property listing website recorded in May 2023.
In a further sign of improving market sentiment, Rightmove said there were 12% more sellers in the market compared to April 2023. The number of agreed sales also jumped 13% against the year.
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But Rightmove’s director of property science, Tim Bannister, said: “The market remains very price-sensitive. Sellers who are keen to secure their sale will still need to price realistically for their local market and avoid being overambitious at the start of marketing to give themselves the best chance of finding a buyer.”
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It comes as house prices are expected to fall over the course of 2024. Other house price indexes (HPIs) have shown UK sold house prices remain lower compared to last year, with sellers having to accept hefty discounts on their asking prices.
The housing market has struggled with expensive UK mortgage rates, which have remained elevated due to market jitters over the Bank of England base rate. The wider cost of living crisis is also still eating into buyer affordability, especially for first-time buyers.
Whilst London usually takes the top spot as the region with the highest asking price annually, the four regions bypass the city’s 2.8% year-on-year change.
Scotland saw the highest annual change in asking prices in the UK. They rose 3.8% annually to an average asking price of £195,497. The North East of England was not far behind with a 3.4% year-on-year rise to an average of £190,060. Also coming in at a rate of more than 3% was Yorkshire and Humber, which saw 3.1% annual rise to an average of £251,748.
London still holds the highest average property price of £696,120. But its growth rate of 2.8% was lower than most regions. The East of England was the only area to see a fall in annual asking prices. It recorded a drop of 0.8%, but property prices still sat at around £400,000.
Rightmove said the top of the housing ladder drove the growth seen across the wider market. High-end homes, like four-bed detached houses and properties with more than five bedrooms, saw the number of agreed sales climb by a fifth year-on-year.
First-time buyer homes and second-rung properties saw less sales activity - although the volume of agreed sales remained in growth. These properties saw sales climb 9% and 13% respectively.
Is now a good time to buy or sell a house?
With the latest set of inflation figures showing the Consumer Prices Index (CPI) dropped to 3.2% in March, experts still expect a cut in interest rates will soon be on the way.
When a path to a lower Bank of England base rate becomes clearer, it’s expected mortgages will start getting cheaper again, which should mean buyer affordability will improve.
Rightmove says the average five-year mortgage rate is currently at 4.84%. This compares to pre-pandemic levels when an average of the same mortgage product stood at roughly 2.4%.
While springtime traditionally brings higher prices as demand soars, Bannister says there are likely to be blips in demand later this year. It means sellers may need to act quickly to get a better price.
He said: “The summer holidays are typically a time of distraction for some home-hunters, as they temporarily pause their search and head abroad or to the British seaside. In addition, the Euro 2024 football tournament and the Olympics this summer, likely followed by a General Election during the second half of the year, will add more buyer distractions than usual.
“There appears to be a tempting window of opportunity for those who are considering a move to act now before these distractions arrive. While affordability is still very tight, property and mortgage market conditions remain stable, buyer choice is good, and many sellers will recognise that it is the right time to negotiate on price to agree a deal. The boost in activity suggests that many home movers are already springing into action to make their move.”
