UK residential asking prices have reached a new record high of £379,517 in May, according to the latest data from Rightmove.
However, the modest 0.6% monthly increase – the smallest May rise since 2016 – suggests a softening in momentum as sellers contend with a more competitive and price-sensitive market.
This marks the fifth consecutive year of record May prices, driven in part by seasonal patterns.
Yet this year’s data reflects a more cautious late-spring landscape, with a 10-year high in stock levels creating increased competition among vendors and dampening the pace of price growth.
FIRST MONTHLY DECLINE
Buyer demand fell 4% in April year-on-year – the first monthly decline in 2025. Analysts say the impact of April’s stamp duty increase in England and uncertainty around the Bank of England’s interest rate path are contributing factors.
While early signs in May suggest a rebound in activity, much of 2025’s buyer demand remains front-loaded into the first quarter.
Average wages are up over 5% year-on-year, outpacing annual house price growth of 1.2%. Meanwhile, mortgage rates continue to ease: the most competitive 2-year fixed deal now sits at 3.72%, down from 4.75% this time last year.
The Bank of England’s recent base rate cut is expected to encourage further reductions in lending rates, improving access to finance for residential buyers.
SUPPLY AND DEMAND
Supply continues to outstrip demand, with new listings up 14% on 2024 levels. This expansion in inventory is contributing to slower sale cycles and sharper pricing strategies.
Rightmove reports a 32% increase in the number of vendors switching agents, typically driven by frustration at sluggish sales or initial overpricing. Properties that require price reductions take, on average, over two months longer to sell.
Despite a 5% increase in sales agreed compared with April 2024, the market remains finely balanced.
UNDER PRESSURE
Sellers are under increasing pressure to adjust expectations and respond to local competition, as buyers benefit from greater choice and improved leverage in negotiations.
As Q2 progresses, the trajectory of mortgage rates and broader economic signals – including wage growth and interest rate policy – will play a pivotal role in shaping buyer sentiment and transaction volumes across the remainder of the year.
DRASTIC REDUCTIONS
Colleen Babcock, Property Expert at Rightmove, says: “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.”
INDUSTRY REACTION
David Gardner, MD at DDM Residential in Lincolnshire, says: “We’re seeing strong agreed sales across Northern Lincolnshire, currently tracking notably higher than May 2024.
“This uptick is driven by improved stock availability and more favourable mortgage rates. However, the market remains competitive.
“Sellers who are pricing realistically are seeing the best results, often achieving quicker sales. Buyer confidence is definitely improving, but value sensitivity is still key. It’s a promising sign that activity is picking up after a post-stamp duty increase lull.”
POLITICAL HEADWINDS
Polly Ogden Duffy, Managing Director at John D Wood & Co, says: “Nationally there is an increase in property supply unmatched by an increase in number of buyers.
“In London, some discretionary sellers and buyers are pausing as the impact of political and economic headwinds take time to settle.
“ Pricing strategy is critical right now. With an increased supply of homes for sale buyers can be more selective, and overpricing – unless your property is truly exceptional – is a fast track to stagnation.
“Sensible pricing will be key to attracting committed, proceedable buyers in today’s market.
“That said, there is a compelling opportunity to buy and either upsize or get onto the property ladder.
“The breadth of choice, softer competition, an interest rate drop, and Easter firmly behind us, may offer a clearer runway to secure a home this summer.”
PROPERTY SURPLUS
Tom Bill, head of UK residential research at Knight Frank, said: “Asking prices need to reflect the fact that buyers have a lot of property to choose from this spring.
“Supply has been boosted by landlords selling up due to tougher regulations on the horizon, owners who attempted to act ahead of the stamp duty deadline and vendors who reactivated plans put on hold last year due to the election and Budget.
“Meanwhile, buyers are hesitant due to domestic and global economic concerns, creating an imbalance that signals downwards pressure on prices in the short term.
“However, the interest rate environment should continue to improve and looser mortgage lending rules should underpin demand later this year. We expect 3.5% average UK price growth in 2025.”
SELLERS NEED TO GET REAL
Jeremy Leaf, north London estate agent and a former RICS Residential Chairman, says: “The recent base rate reduction seems to have made little or no difference to the approximately four out of five of our sellers who are also buyers.
“Most are concentrating on the difference between sale and purchase price rather than the headline figure achieved, particularly while activity remains relatively subdued and buyers are in charge.
“However, this latest Rightmove survey shows that some sellers are still not getting it as a significant proportion of asking prices remain stubbornly high.
“Offers received now may be the best available for some time bearing in mind the significant choice available.
“Fortunately, most sellers are negotiating as hard as they can and are aware of the consequences of missing out.”
SLIGHT ADJUSTMENT
David Johnson, MD of property consultancy INHOUS, says: “Buyer demand picked up immediately after the bank holidays and has remained strong throughout May.
“This level of buyer motivation is resulting in the majority of sellers receiving multiple offers and achieving their asking price.
“One- and two-bedroom apartments are particularly sought-after as well as larger family homes in and around commuter hotspots.
“Property prices in central London are seeing a slight adjustment which is predominantly caused by an influx of wealthy investors deciding to sell up. Savvy house hunters are ceasing this opportunity to enter price negotiations and secure a property in areas such as Belgravia, Knightsbridge or Chelsea below asking price.”
NO SURPRISE
Toby Leek, President of NAEA Propertymark, says: “It’s no surprise that April saw a lull in market activity as many of those who wanted to move home, did so before stamp duty increased from 1 April.
“However, prices and the market long term remain resilient and with improved mortgage products now being introduced, buyers are finding extra room in their finances, keeping the cogs of the housing market rotating, and in turn, the wider economy too.
“Alongside this, sellers must do their research and market their home with an experienced agent who is less likely to overprice and push for a realistic and timely sale.”
