The property market got back to business as usual in May after April’s hard reset. Says Jonathan Hopper, CEO of Garrington Property Finders.
He continued “Nationwide’s data shows that average prices swung back into growth territory last month, more than making up for April’s slight loss and pushing the annual rate of price inflation back up to 3.5%.
“Though still well short of the frothy price rises seen at the end of last year as buyers raced to complete their purchases before the Stamp Duty deadline, at a national level prices are squarely back on an upward trajectory.
“But as anyone planning a move knows, the numbers that matter most are what’s happening to prices in your area, and what’s happening in the area where you want to buy.
“While the national averages look comfortably upbeat, they mask some huge regional variations.
“In parts of London and much of southern England, the supply of homes for sale is now far outstripping demand. This is especially true in more expensive, and often highly desirable, areas where the trickle of supply has turned into a flood.
“In these areas, buyers find themselves blessed with plenty of choice and the leverage to negotiate on price. This is keeping prices flat or even nudging them down.
“At the other end of the scale, demand is often exceeding supply in areas seen as representing strong value – and this is driving prices up rapidly in much of northern England.
“With the distorting effects of March’s Stamp Duty changes – which pumped up prices and led thousands of buyers to bring forward their purchases – now past, the market is returning to a more settled dynamic, in which prices are once again being determined by the interplay of supply and demand.
“This is much healthier than the breathless and unsustainable rush seen in the first quarter of the year. With mortgage interest rates likely to continue creeping down over the next year, the market has got back onto a stable footing.”
Also commenting on latest Nationwide house prices showing a 3.5% increase compared to last year, Daniel Austin, CEO and co-founder at ASK Partners, said:
“Despite a rise, we believe that growth is likely to face pressure and remain steady, as higher borrowing costs start to affect buyers, despite the market’s continued resilience. Investors and developers in the residential sector remain motivated by the supply demand imbalance and under the Labour government, we think there will be more projects that get off the ground. We are seeing a greater variety of housing options, such as co-living schemes, coming to market which fulfil the growing requirements of younger professional buyers. If prices flatten and interest rates start to fall, we will see more first-time buyers able to step onto the property ladder.”
Whilst Jonathan Handford, Managing Director at national estate agent group Fine & Country said.
“House prices rose in May, reversing the decline seen in April and offering a tentative sign of resilience in the housing market.
“The uptick follows a cooling period triggered by the stamp duty changes, which had pulled demand forward as buyers rushed to beat the revised threshold.
“In the weeks that followed, the market appeared to settle into a lull, leaving the market quieter in April. But May’s price growth suggests interest is picking up again, though conditions remain mixed.
“Inflation climbed to 3.5% in April, keeping pressure on household budgets. In response to broader economic concerns, the Bank of England cut interest rates in May to 4.25%, aiming to ease borrowing costs and support growth. This move could help some homeowners and buyers, but with inflation still above target, the path forward is uncertain.
“Affordability remains a key challenge, especially for first-time buyers. Rising prices, higher deposits, and tougher lending conditions continue to keep many people on the sidelines. To truly boost demand, more support is needed, such as help for first-time buyers, tax breaks, or new schemes to make ownership more accessible.
“That said, rising prices may not be felt evenly across the country. Some areas could still see adjustments, creating chances for buyers who’ve been priced out in the past. If borrowing becomes more affordable and inflation begins to ease, we could see more people return to the market later this year.
“For now, May’s price increase shows the housing market is trying to stabilise after months of change. What happens next will depend on the broader economy and whether more is done to make buying a home achievable for more people.”