House prices reach another record, although growth slows

The price of houses coming to market in the UK hit a fifth consecutive record on Monday, although slowing growth saw the speed of the rise moderate significantly from previous months.

According to property marketing platform Rightmove, the average price of property coming to market hit another new record for a fifth consecutive month, rising by 0.3% - or £1,113 - to £368,614.

That was the smallest increase since January, as the pace of price rises started to slow.

Despite five consecutive interest rate rises and the increasing cost of living, buyer demand for each available property remained “very strong” according to Rightmove, being more than double the pre-pandemic five-year May average.

“The exceptional pace of the market is easing a little, as demand gradually softens and price rises begin to slow, which is very much to be expected given the many record-breaking numbers over the past two years,” said Rightmove director of property science Tim Bannister.

“When we look at the number of buyers contacting estate agents compared to 2019 or the pre-pandemic five-year average, demand is still very high compared to what was once considered normal.

“We’re hearing from agents that though they might have had slightly fewer enquirers for each property in recent months, they’re still seeing significant interest from multiple buyers and are achieving successful sales.”

The firm did, however, say it was seeing signs that it was continuing to ease, with the measure down by 8% in May compared to April.

After a “very strong” first half, Rightmove said it was likely that affordability constraints would have a greater influence on market behaviour in the months ahead, with further interest rate rises anticipated.

That, alongside more choice coming to market for buyers and the usual seasonal variations, meant there was likely to be some month-on-month price falls during the second half of the year.

Rightmove said it expected that to bring house price growth by the end of the year to around the 5% it originally predicted in December.

“Entering the second half of the year, we anticipate some further slowdown in the pace of price rises, particularly given the worsening affordability challenges that people are facing,” Tim Bannister added.

“We expect this to bring the annual rate of price growth down from the current 9.7% towards the 5% increase that Rightmove predicted at the beginning of the year.”

Reporting by Josh White at Sharecast.com.