Average asking prices for UK homes rose by 1.1% in April, hitting £372,324 despite a period of prolonged pressure on potential buyers from hiked interest rates.
The average monthly increase of £4,207 is in line with the 10-year average for this time of year, according to property website Rightmove’s (RMV.L) monthly house price index. The average price for a property coming to market for sale is now just £570 short of May 2023’s record of £372,894, while the annual rate of price growth increases to 1.7%, the highest level for 12 months.
The bump can be attributed to strength among prospective sales of the country’s most expensive homes, Rightmove said. The so-called “top-of-the-ladder” sector saw its strongest price growth since 2014.
“While some buyers, across all sectors, will feel that their affordability has improved compared to last year due to wage growth and stable house prices, others will be more impacted by cost of living challenges and stickier than expected high mortgage rates,” said Tim Bannister, Rightmove’s director of property science.
The market remains very price-sensitive, operating at different speeds across its many segments and areas, with prices and sales activity rising more slowly in the more mortgage-dependent, mass-market first-time buyer and second-stepper sectors, Rightmove said.
Read more: Five eco-friendly homes for Earth Day
The number of new sellers coming to the market is up by 12% compared to this time a year ago, and the number of sales being agreed is up by 13% as both seller and buyer activity rebound from last year’s much more subdued spring.
The top end of he market is significantly outpacing the average, with new sellers was up by 18% compared with last year, and the number of sales being agreed was up by 20%.
The moves come as bets ramp up on UK interest rate cuts, with forecasters at EY Item Club looking to a fall of 75bps in 2024, with the first cut to come in June.
In addition to this, EY is expecting 0.7% growth for 2024, a downgrade from the 0.9% previously predicted. However, 2025 growth predictions were upgraded from 1.8% to 2% as barriers to growth fall away. This includes falling inflation, higher consumer spending, and anticipated reductions in interest rates.
While it is uncertain whether Consumer Price Index (CPI) inflation will decline to the Bank of England’s 2% benchmark in April, due to sticky services inflation, the EY Item Club expects it to do so by the second half of 2024.
Watch: What is inflation? Yahoo U explains
Download the Yahoo Finance app, available for Apple and Android.
