According to a report from Rightmove, the “seasonality” of the property market has led to a May price record for the last five years, and annual house price growth was at 1.2%.
The report noted that this month’s increase was smaller than usual and the lowest since 2016 due to a more “subdued late spring market”.
Rightmove said the number of available homes was running at a decade-long high, which was ramping up competition between sellers and limiting growth in newly advertised properties.
The number of new properties coming to the market is 14% ahead of this time last year, keeping buyer choice high and giving buyers an “edge in price negotiations”.
The report explained that April had experienced a post-stamp duty change lull in buyer demand, looking at the number of people contacting estate agents about homes for sale.
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Buyer demand fell by 4% in April compared to the same period last year, which is the first month this year that buyer demand has fallen beneath last year’s level.
The company said year-to-date buyer demand was 3% ahead of the same period last year.
The report noted that some new buyers may have been holding out for the latest base rate decision and President Trump’s tariffs had created global economic uncertainty.
However, Rightmove said there are “early signs” that the slowdown may be “short-lived”, with data showing a rise in buyer demand since the start of May.
The number of sales agreed in April is 5% ahead of the same period in 2024, showing that buyers who are in the market are “serious and are taking advantage of good choice to get deals done”.
The firm said mortgage rates would be a “crucial” factor in buyer demand for the rest of the year, and the downward trajectory is hoped to continue given the latest cut of the base rate.
Rightmove pointed to mortgage lenders changing their affordability stress tests to boost borrowing power as another important factor.
‘A market that favours buyers’
Colleen Babcock, property expert at Rightmove, said: “It’s another new price record this month, but having seen a May price record for the last five years, it appears to be driven more by seasonal factors, given that new buyer demand has slowed.
“The 10-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.
“In the current market, buyers may well have several similar homes to choose from in their area, and a home [that] appears over-priced compared to the competition may not get a second look. This month’s price increase being the lowest in May for nine years is a sign of a market that favours buyers and is more subdued than usual.”
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.
“While we’re not expecting drastic reductions, any lowering of rates will be a boost to buyer sentiment and affordability. With a high number of sellers and a small dip in buyer demand, it’s worth reminding people out there thinking of coming to market that they need to work hard to attract buyer attention. Working with your estate agent to understand your local market and coming to market with a tempting price will give you the best chance of standing out.”
