London prices due to increase

The average British house price reached a record high of £375,131 in May, according to Rightmove. Asking prices of properties coming to market rose 0.8% month on month thanks to pent-up demand from buyers who had paused their plans last year.

“Lower mortgage rates have prompted a recovery in buyer confidence and prices”

Tim Bannister, Rightmove’s director of Property Science Innovation, said: “Some predicted that property prices would suffer sharp falls and take a while to recover following the Bank of England increasing the base rate up to 5.25%, where it has remained since August 2023. However, the momentum of the Spring selling season has exerted enough upwards price pressure to reach a new record asking price.”

Meanwhile, Savills says UK house prices will continue to rise throughout 2024 in a U-turn on its previous forecasts. Lower mortgage rates have prompted a change in outlook from a 3% drop to a 2.5% increase this year and a prediction that the average cost of a property could rise by £61,500 over the next five years. The firm said it now expected nationwide price growth every year up to the end of 2028.

Lucian Cook, Head of UK Residential Research at Savills, said: “The highly competitive nature of the mortgage market has meant that lenders have fairly aggressively priced in the prospect of cuts in bank base rate, causing buyer confidence, and prices, to recover somewhat.”