Average UK house prices hit record high in May

The average UK house price has hit a new all-time high this month according to Rightmove’s House Price Index, having jumped by 1.8% (+£6,647) compared to last month – the biggest monthly increase of the year so far – to reach £372,894.

According to Rightmove’s House Price Index the average UK house price has reached £372,894 – the highest on record – and increased by 1.8% (+£6,647) on the previous month – the largest monthly increase of 2023 so far. This increase is coupled with an annual price growth of +1.5% on last year.

Buyer demand in the UK property market remains high as sellers are continuing to price their properties with confidence, causing the average property price to rise by almost £7,000 in one month and defying the expectations predicted by various sources at the start of the year. Property website Rightmove have also reported an increase in buyer demand in their latest House Price Index of 3% and with the number of sales agreed only 3% behind the highs of 2019, the market is responding accordingly, and this has filtered through to pricing.

“This month’s strong jump in new seller asking prices looks like a belated reaction and a sign of increasing confidence from sellers, as we’d usually see such a big monthly increase earlier in the spring season. Steadying mortgage rates and a generally more positive outlook for the economy are also contributing to more seller confidence.” Tim Bannister, Rightmove’s Director of Property Science.

A balance in the average fixed rate mortgage is also contributing to the increase in buyer demand and confidence in the market, as the average for a five-year fixed mortgage is now 4.56% - down from the highs of 5.89% in October following Kwarteng’s controversial budget. As mortgage rates continue to stabilise week on week, buyers are able to plan for the expected costs of their mortgages and are now more eager to purchase.

“This month’s record price is a strong indication of sellers’ confidence, and we can see from activity levels and the still relatively limited choice of property for sale that this confidence is justified in some segments of the market.” Tim Bannister, Rightmove’s Director of Property Science.

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