UK average house price hits record high but number of sales is falling, data shows

Prices declined in the South East for the first time since 2011

Rightmove said the figures show a less buoyant market overall (Reuters)

House prices hit record highs in the last month, but the number of sales fell 5 per cent compared to this time last year, according to the latest Rightmove house price index.

The national average asking price hit £308,075 in May, up 0.8 per cent from £305,732 in April, and seven out of 11 UK regions recorded their highest ever asking prices, with increases of more than 4 per cent in the East Midlands, West Midlands and Wales.

However, Rightmove said the overall picture is “one of a less buoyant market”, both in terms of price growth and number of sales agreed.

London continued its downward trend, with prices in the capital and the commuter belt showing the biggest decline. The number of year-to-date sales agreed in the South East was down 8.5 per cent compared with 2017, and dropped 6.9 per cent in London. Asking prices in the South East also fell, by 0.1 per cent, the first time the region has recorded a decline since 2011.

Miles Shipside, Rightmove director and housing market analyst, said this indicates that “the softening in the London market is now spreading to its commuter belt, while there are signs that inner London may be closer to a price recovery”.

“While this gives buyers in the South East the opportunity to negotiate prices down, in some of the more buoyant areas of the country the options to do so are more limited by a shortage of suitable properties on the market,” he added.

Brian Murphy, head of lending for the Mortgage Advice Bureau, said: “This latest report indicates a widening gulf between the expectations of vendors and the affordability of buyers.

“Just because there are few properties on the market in any one conurbation, that doesn’t necessarily mean that vendors are able to ambitiously price their property if they want to achieve an actual offer. The fact that transaction levels appear to have dropped would perhaps evidence this.”

Mr Murphy added: “It’s also perhaps reasonable to suggest that the ongoing lack of available properties for sale is somewhat a self-fuelling cycle, as if there is not a lot of choice for buyers who then can’t find what they are looking for, they simply don’t list their own property for sale, and so it goes on, bringing the market to a grinding halt as a result.”