Spring revival boosts UK property market as confidence returns

In May, house prices saw a significant rise, indicating a positive shift in the UK property market. Nationwide reports a 0.4% increase in house prices for the month, bringing the annual growth to 1.3% and setting the average house price at £264,249.

Renewed consumer confidence
Sarah Coles, head of personal finance at Hargreaves Lansdown, observes a renewed confidence among buyers and sellers. “Spring has come to the property market, with house prices skipping up to an average of £264,249 – the highest since October 2022. Consumer confidence has overcome the pressure of higher prices and mortgage rates, keeping buyers and sellers in the game.”

Despite mortgage rates climbing from 5.56% in January to 5.92% in May, buyers remain undeterred. Coles attributes this resilience to improved personal financial positions, bolstered by easing inflation, rising wages, and low unemployment rates. “The easing of inflation, coupled with robust wage growth, and relatively low levels of unemployment, mean people are feeling more secure,” she adds.

Market dynamics and buyer behaviour
The surge in market activity has been noted by industry leaders. Ruth Beeton, Co-Founder of Home Sale Pack, highlights the acceleration since the start of the year. “Market activity has accelerated significantly since the start of the year and a surge in buyer activity has helped to revitalise the rate of house price growth being seen on both a monthly and annual basis,” Beeton comments.

However, she warns of potential delays due to increased demand. “As activity continues to build, the time it takes to push a sale through to completion is likely to increase as well,” she says, advising prospective movers to act promptly to ensure they can complete transactions by the end of the year.

Expert insights on market outlook
Nathan Emerson, CEO of Propertymark, acknowledges the market’s strong start but cautions about a potential summer slowdown. “We are conscious there may be a potential slowdown across the summer as a knock-on effect following the general election, but with inflation firmly on its journey downward and with scope for interest rate cuts, we may soon see a much welcome influx of highly competitive deals from lenders hit the marketplace.”

Verona Frankish, CEO of Yopa, is optimistic about the market’s resilience despite higher interest rates. “Despite a prolonged period of higher interest rates, we’re yet to have seen any notable decline in property values and it seems as though the tide has now well and truly turned,” Frankish states. She expects the market to maintain its momentum, especially with potential base rate reductions on the horizon.

Michelle Stevens, a mortgage expert at Finder.com, notes the strengthening buyer demand and the potential for rate cuts to further stimulate the market. “The Bank of England is widely predicted to cut rates in the coming months, and as a result, buyers who have so far held off are beginning to return to the market,” Stevens explains. However, she cautions that affordability remains a concern for many households, which could temper house price growth.

Positive signs with cautious optimism
The recent rise in house prices and increased market activity signal a robust start to the year for the UK property market. With consumer confidence on the rise and potential interest rate cuts on the horizon, the outlook appears positive. However, experts advise caution, noting that affordability issues and the potential impact of the upcoming general election could influence market dynamics in the coming months. Overall, the property market is showing encouraging signs of recovery, promising a stable year ahead for buyers and sellers alike.