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UK Housing Market Sees Record Asking Prices as Buyer Demand Begins to Recover

Average asking prices reach nearly £380,000 in May, the highest on record, as mortgage rates ease and supply hits a decade-high.

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A view of residential houses in London, Britain, January 23, 2025. REUTERS/Hannah McKay/File Photo
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House prices are expected to climb another 3.5 per cent this year

Overview

  • The average asking price for UK homes rose by 0.6% in May to a record £379,517, marking the second consecutive month of record highs.
  • May's price increase was the smallest for this time of year since 2016, reflecting heightened competition among sellers due to the highest number of listings in a decade.
  • Buyer demand dipped in April following the end of stamp duty relief but showed early signs of recovery in May, with agreed sales up 5% year-on-year.
  • Mortgage rates have fallen, with the lowest two-year fixed rate now at 3.72%, down from 4.75% last year, improving affordability for buyers.
  • Experts emphasize the importance of competitive pricing strategies for sellers, as increased supply gives buyers more options and leverage in negotiations.