The housing market has reached a new milestone as the average price for residential properties entering the market surged to a record high of £372,894 in May, marking a substantial increase of 1.8% or £6,647, according to data from property portal Rightmove.

This remarkable development coincides with reports of a 3% rise in buyer demand compared to 2019, with sales agreed trailing only 3% behind the levels observed in the same period. Notably, first-time buyer demand has witnessed a notable increase of 6% compared to pre-pandemic levels, which can be attributed, at least in part, to rising confidence and the allure of falling mortgage rates.

Despite mortgage rates still being considerably higher than pre-mini-Budget figures recorded in September, the average 5-year fixed rate for an 85% loan-to-value (LTV) mortgage has declined to 4.56% from 5.89% in October.

A significant shift has also been observed in the time it takes to sell properties, with first-time buyer properties now remaining on the market for an average of 53 days, up from 35 days a year ago. Similarly, second-stepper properties are selling within an average of 52 days, compared to 28 days in the previous year.

Tim Bannister, Director of Property Science at Rightmove, suggests that the substantial increase in new seller asking prices during this month signifies a delayed response and growing seller confidence, typically observed in the earlier stages of the spring season. Bannister states, "This month's record price is a strong indication of sellers' confidence, and given the levels of activity and relatively limited property options available, this confidence seems justified in certain market segments."

Regional variations across the UK are also evident. Scotland has experienced a significant year-on-year rise, with average house prices soaring by nearly 5%, resulting in an average Scottish home costing £191,407. Meanwhile, in Wales, prices have risen by 0.7% to reach £259,452, and properties are spending an average of 52 days on the market before being sold.

London continues to hold the distinction of having the highest property prices in the UK, with an average house price of £696,477. Hackney, in particular, has witnessed a substantial increase, with prices soaring over 5% compared to the previous year, now reaching £724,189.

Notwithstanding these positive trends, Bannister cautions that sellers in the higher price range may need to adopt more competitive pricing strategies to secure buyers in the current market landscape.