UK House Prices Soar to Record High of £375,000

Despite high mortgage rates, pent-up demand from last year drives average British house price to new heights. Find out more.

The UK housing market continues to show resilience as the average British house price hit a new peak of £375,131 in May, as reported by Rightmove. This marks a 0.8% increase, or £2,807, from the previous month. The surge in property prices can be attributed to pent-up demand from buyers who postponed their plans last year. Despite mortgage rates remaining high for an extended period, home mover activity has been on the rise.

The number of sales agreed in the first four months of the year was 17% higher compared to the same period last year. May has historically been a strong month for price growth, with new price records being set in 12 out of the last 22 years. Since the previous record was set in May 2023, average prices have only increased by 0.6% overall.

Rightmove forecasts that the total number of completed house sales for the year will reach approximately 1.1 million. However, the lengthy process of completing a sale after finding a buyer remains a challenge for both agents and movers. On average, it takes five months from agreeing on a sale to legal completion, and more than seven months from a seller coming to market to completing their move.

In a positive development for the mortgage market, HSBC UK, Barclays, and TSB recently reduced their mortgage rates. Meanwhile, property firm Hamptons reported that tenants renewing their existing contracts in Britain experienced an average rent increase of 8.3% over the 12 months leading up to April, surpassing the rental growth on newly let properties, which stood at 6.4%.

The UK housing market continues to show strength, with record-high prices and increased buyer activity. However, challenges such as lengthy sale completion times and rising rental costs pose obstacles for both buyers and sellers in the market.