The Housing Market’s Upturn Nearly Sets a New Price Record

The average asking price for a house in Britain has increased by 1.1% since March, reaching £372,324.

This typical seasonal rise has brought prices almost to the record high set in May 2023, now just £570 shy of that peak.

‘Top-of-the-ladder’ homes—larger four-bedroom detached houses and properties with at least five bedrooms—are behind the increase, experiencing the strongest early-year price growth in a decade.

What’s driving the current surge in higher-end properties?

After the mini-Budget in September 2022, mortgage rates spiked, leading to a lull in movement for those eyeing premium homes.

However, with a significant rise in sellers (+18%) and a notable uptick in sales agreed—especially for high-end homes (+20%) compared to early 2023—the market is now abuzz with previously delayed demand.

New sellers, bolstered by this surge, are listing their homes at higher asking prices than last year.

Tim Bannister, our property expert, notes that movers in the high-end bracket are generally less affected by increased mortgage rates and, being more equity-rich, find it easier to purchase. Despite improvements in wages and steady house prices aiding some house buyers, others are feeling the squeeze due to living costs and remaining high mortgage rates.

First-time buyers often face the steepest mortgage rates with their high loan-to-value (LTV) needs, while those further up the ladder usually benefit from higher deposits and home equity, leading to more favourable borrowing rates.

Additionally, the mortgage market is showing signs of stabilization, with fewer large-scale rate fluctuations that had previously caused potential buyers to postpone their home-buying plans.

How have house prices changed over the past year?

Last year’s latter half saw a slight downward trend in asking prices, ultimately ending about 1% lower than the year before.

But following a wave of new listings on Boxing Day 2023 and a strong start to this year’s spring selling season, asking prices have climbed 1.7% compared to the same time last year.

Early-year activity has translated to rising asking prices as new sellers no longer feel pressured to drop prices to attract buyers.

Delve deeper into the local housing market dynamics and find the latest insightful data in our monthly House Price Index.

Is it the right moment to buy or sell?

The vigorous activity this spring suggests many are finding it the perfect time to pursue a new home, aiming to settle before the slow summer period.

Tim adds that the approaching holiday season, major events like Euro 2024, the Olympics, and an anticipated General Election later in the year, are expected to distract potential buyers, creating a current window of opportunity for those considering a move.