Larger property has pushed asking prices to near record levels in April, following data that suggests the UK housing market is still recovering despite the recent volatility in mortgage rates.
On average, the asking price for new properties reached £372,324 in the four weeks to mid-April, an increase of just over 1% on the previous month and only £570 below last year's May level, which is the highest amount ever recorded since data collection began in 2001 by property portal Rightmove.
But the biggest factor behind the increase is the 2.7% monthly rise in the cost of four-bedroom detached houses and larger homes.
Tim Bannister, Rightmove's director of scientific innovation, explained that the top-end sector is driving pricing activity earlier this year because people moving into this sector tend to be more equity-rich and less sensitive to rising mortgage interest rates.
- National Average Asking Price
| Month | Avg. asking price | Monthly change | Annual change | Index |
| April 2024 | £372,324 | +1.1% | +1.7% | 287.8 |
| March 2024 | £368,118 | +1.5% | +0.8% | 284.6 |
- National Average Asking Price By Market Sector
| Sector | April 2024 | March 2024 | Monthly change | Annual change |
| First time buyers | £227,110 | £226,370 | +0.3% | +1.0% |
| Second-steppers | £342,501 | £339,341 | +0.9% | +0.9% |
| Top of the ladder | £682,661 | £664,422 | +2.7% | +2.4% |
Impact of Housing Market Volatility
Volatility in the mortgage market has affected trends in the UK property market. In the summer of 2023, mortgage rates peaked, but fell sharply by the end of the year. However, mortgage rates have fluctuated somewhat since February due to the Bank of England's reassessment of interest rate cuts.
According to inflation data published in March, inflation fell to 3.2%, its lowest level for two and a half years. Due to the Bank of England's reassessment of the scope for interest rate cuts following this unexpected fall in inflation, mortgage rates have been increased.
Another study by Rightmove found that the average asking price for a property in the UK has risen by 1.7% per annum. This is the highest annual rate recorded in the last 12 months.
This rise in prices is due to the existence of a sale agreement and a 12% annual increase in the number of new properties coming onto the market.
CEO of national sales at Leaders Romans Group, Kevin Shaw, reported a positive start to 2024, with an increase in the number of properties coming to market and a rise in sales. However, price sensitivity remains an issue, so he advised sellers to set reasonable expectations and be realistic.
It is worth noting that the Rightmove Property Price Index is created using information from listings on their portal from over 13,000 estate agents.
Unlike other indices such as the Official House Price Index, which tracks prices of completed transactions, or the Nationwide Index, which is based on approved mortgages, this index gives an early indication of house prices in the sales process.
Asking Prices Rise After Initial Dip in 2023
In the latter half of 2023, average asking prices dropped slightly, ending the year around 1% down on the previous 12 months.
However, as a result of a record number of homeowners putting their homes up for sale on 26 December 2023 and a strong start to the spring selling season, average asking prices rose slightly and are now 1.7% higher than this time last year.
The increase in housing market activity seen so far in 2022 has contributed to the rise in asking prices. Indeed, new owners who put their property up for sale do not feel obliged to lower their price in order to find a buyer.