"Despite April’s dip in new buyer demand, there are early signs of a bounce-back in May. Mortgage interest rates are lower than they were at this time last year, and the recent Bank Rate cut also gives us some optimism for further mortgage rate drops that will enable more to buy"
- Colleen Babcock - Rightmove
New seller asking prices have increased by 0.6% this month, adding £2,335 and pushing the average to a new high of £379,517, according to the latest data released this morning by Rightmove.
While this marks a fifth consecutive May record, the rise is the smallest for this month since 2016. The growth is being held back by a surge in supply, with the number of available homes reaching a ten-year high, prompting more intense competition among sellers.
Following a particularly active March, the late Spring market has lost some momentum. New buyer demand fell in April, coinciding with the recent stamp duty increase in England. According to the data, buyer interest dropped 4% compared to April 2024. However, the overall year-to-date demand remains 3% higher than last year, and recent data suggests early signs of renewed interest in May.
Despite the dip in new buyer inquiries last month, sales agreed were still 5% above April 2024 levels. This suggests buyers remain active when presented with well-priced options. Meanwhile, the number of newly listed properties is now 14% higher than a year ago. With more homes entering the market than buyers, sellers are being advised to temper their price expectations.
Rightmove’s weekly mortgage tracker highlighted that the lowest available two-year fixed rate has fallen to 3.72%, down from 4.75% a year ago. This follows the latest Bank Rate reduction, the second of the year, and is expected to improve affordability as the year progresses.
“The ten-year high choice of homes for sale means that sellers need to be aware of the level of competition they’re facing for the attention of buyers and the prices that are being advertised in their location,” said Colleen Babcock, property expert at Rightmove. “In the current market, buyers may well have several similar homes to choose from in their area, and a home which appears over-priced compared to the competition may not get a second look. This month’s price increase is the lowest in May for nine years is a sign of a market that favours buyers and is more subdued than usual.”
April’s slowdown appears tied to both the tax change and wider economic uncertainty. Some buyers may have delayed decisions while awaiting the outcome of the May Bank Rate meeting. Despite that hesitation, the data suggests those who are active remain serious about securing a purchase. Babcock added: “Despite April’s dip in new buyer demand, there are early signs of a bounce-back in May. Mortgage interest rates are lower than they were at this time last year, and the recent Bank Rate cut also gives us some optimism for further mortgage rate drops that will enable more to buy.”
Affordability is gradually improving. Average wages have increased by over 5% compared to last year, outpacing house price growth, now at 1.2%. Lenders have also begun to ease affordability checks and offer lower rates. This could give buyers a better chance to borrow more, especially as broader economic indicators remain relatively stable.
However, an increase in seller numbers means competition to attract buyer attention is intensifying. Rightmove’s research indicates that starting with an inflated asking price often backfires. Properties that undergo a price reduction after launch can take over two months longer to sell. Additionally, the number of sellers switching estate agents has risen by 32%, reflecting frustration with stagnant listings and unrealistic pricing.
David Gardner, managing director at DDM Residential in Lincolnshire, said: “We’re seeing strong agreed sales across Northern Lincolnshire, currently tracking notably higher than May 2024. This uptick is driven by improved stock availability and more favourable mortgage rates.
"However, the market remains competitive. Sellers who are pricing realistically are seeing the best results, often achieving quicker sales. Buyer confidence is definitely improving, but value sensitivity is still key. It’s a promising sign that activity is picking up after a post-stamp duty increase lull.”
Tom Bill, head of UK residential research at Knight Frank, said, “Asking prices need to reflect the fact that buyers have a lot of property to choose from this spring. Supply has been boosted by landlords selling up due to tougher regulations on the horizon, owners who attempted to act ahead of the stamp duty deadline and vendors who reactivated plans put on hold last year due to the election and Budget.
"Meanwhile, buyers are hesitant due to domestic and global economic concerns, creating an imbalance that signals downward pressure on prices in the short term. However, the interest rate environment should continue to improve, and looser mortgage lending rules should underpin demand later this year. We expect 3.5% average UK price growth in 2025.”
Toby Leek, President of NAEA Propertymark, the professional body for estate agents, comments, “It’s no surprise that April saw a lull in market activity as many of those who wanted to move home did so before Stamp Duty increased from 1 April. However, prices and the market long term remain resilient, and with improved mortgage products now being introduced, buyers are finding extra room in their finances, keeping the cogs of the housing market rotating and, in turn, the wider economy too.
“Alongside this, sellers must do their research and market their home with an experienced agent who is less likely to overprice and push for a realistic and timely sale.”
