House prices grow to their highest level in a year

Alongside this, the average asking price of property coming to the market rose by 1.1% or £4,207 to £372,324 – just £570 short of the record seen in May 2023. A major factor behind this has been due to the growth seen in the largest homes, top-of-the-ladder sector, which is seeing its strongest start to the year since 2014.  

Despite this the market remains price-sensitive and “operating at different speeds” with prices and activity rising more slowly in more mortgage dependent markets, such as the first-time buyer and second-stepper sectors.  

Rightmove’s director of property science Tim Bannister said: “he top-of-the-ladder sector continues to drive pricing activity at the start of the year, with movers in this sector typically less sensitive to higher mortgage rates, and more equity rich, contributing to their ability to move.  

“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.  

“Despite these factors, it has been a positive start to the year in comparison to the more muted start to 2023. However, agents report that the market remains very price-sensitive, and despite the current optimism, these are not the conditions to support substantial price growth.  

“Sellers who are keen to secure their sale will still need to price realistically for their local market and avoid being overambitious at the start of marketing to give themselves the best chance of finding a buyer.” 

Meanwhile the number of new sellers coming to the market is up by 12% when compared to this time a year ago, while the number of sales being agreed increased by 13% as both seller and buyer activity rebound from last year’s more subdued Spring.  

Most of this activity came from the top-of-the-ladder sector with new seller numbers increasing by 18% year-on-year, and the number of sales being agreed going up by 20%.  

Overall, the number of sales being agreed is now level with 2019 despite buyer conditions being challenging with the average five-year mortgage rate now at 4.84%, while average property prices are 22% higher. By contrast, affordability has been assisted by average wage growth of 27% over this time.  

Bannister said: “The summer holidays are typically a time of distraction for some home-hunters, as they temporarily pause their search and head abroad or to the British seaside. “In addition, the Euro 2024 football tournament and the Olympics this summer, likely followed by a General Election during the second half of the year, will add more buyer distractions than usual.  

“There appears to be a tempting window of opportunity for those who are considering a move to act now before these distractions arrive. While affordability is still very tight, property and mortgage market conditions remain stable, buyer choice is good, and many sellers will recognise that it is the right time to negotiate on price to agree a deal.

“The boost in activity suggests that many home movers are already springing into action to make their move.”