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Residential asking prices in the UK recorded a stronger-than-usual rise in May, according to property portal Rightmove, even as global uncertainty linked to the Iran conflict continued to affect sentiment. Average asking prices increased 1.2% month-on-month, above the typical seasonal rise seen during this period. Mortgage rates also eased slightly, offering some relief to buyers. However, annual price growth remained negative, while sales activity stayed mixed. The number of homes available for sale continued to remain at its highest level in more than a decade, indicating that supply in the market is still elevated.
Asking prices for homes across the UK increased more than normally seen for this time of the year, according to fresh data released by Rightmove. The property platform stated that prices rose 1.2% month-on-month in May, higher than the usual 1% increase typically recorded during the period. In comparison, asking prices had risen 0.8% in April over March. Advertisement
The increase came despite continued concerns around the Iran war, rising living costs and wider global economic uncertainty. Colleen Babcock, property expert at Rightmove, said market activity had remained relatively stable even amid ongoing affordability pressures and uncertain international conditions.
On a yearly basis, however, asking prices were still 0.3% lower compared to the same period last year, showing that the market has not fully recovered from the slowdown seen over the past year. Britain’s housing market has been facing pressure from elevated borrowing costs, weaker consumer confidence and affordability challenges, especially in London and southeast England.
The report also highlighted that mortgage borrowing costs showed signs of easing. The average two-year fixed mortgage rate fell to 5.18% in the past week from 5.42% a month earlier. The decline could provide some support to buyers who have delayed purchases due to high financing costs over the last two years.
Rightmove noted that affordability conditions improved slightly for first-time buyers in London and southeast England as annual price declines in those regions helped reduce pressure on buyers entering the market. The UK housing sector has seen weaker demand in recent quarters as high interest rates reduced purchasing power, particularly among younger buyers.
At the same time, the number of homes available for sale remained at an 11-year high, indicating that supply in the market continues to outpace buyer demand in several regions. Elevated housing inventory has also limited the pace of price growth despite seasonal demand.
The survey further showed that sales agreed were 4% lower compared to a year earlier. However, transactions were still 2% higher than the same period in 2024, suggesting that activity has stabilised modestly after a prolonged slowdown.
The UK property market has been gradually adjusting to the higher interest rate environment introduced after inflation surged sharply in recent years. Although borrowing costs remain elevated compared to pre-2022 levels, recent moderation in mortgage rates has improved sentiment across parts of the housing market.
Source Reuters
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