The pace of house price growth slowed in May, with potential buyers’ tightening budgets set to slow growth further in the months ahead.
According to today’s Rightmove’s house price index, buyer demand for available properties was down eight per cent last month, versus April.
Even so, the price of property smashed another record, for the fifth month in a row, with the average price hitting £368,614.
The average price has leaped by just 0.3 per cent, an increase equivalent to £1,113. This was the smallest rise since January.
Annual growth is still on track to be five per cent by the end of the year.
Price growth is set to slow down further because of house-hunters’ affordability constraints, a levelling out of supply and demand, and anticipated seasonal price drops.
The number of homes coming onto the market was up seven per cent in comparison to the same month last year. However, supply levels still sit below 2019 levels.
Buyer demand for each available property was still buoyant versus pre-pandemic levels. Demand was more than double the pre-pandemic five-year May average – an increase of 113 per cent.
“The exceptional pace of the market is easing a little, as demand gradually softens and price rises begin to slow, which is very much to be expected given the many record-breaking numbers over the past two years,” Rightmove’s director of property science, Tim Bannister, explained this morning.
40-year high inflation was one reason for real estate experts to forecast a slowdown in the rate of price increases, from the current 9.7 per cent rate.
Potential buyers are also seeing household bills rise across the board, with sharp increases in energy, fuel and grocery costs this year.
Inflation is set to surpass nine per cent when official statisticians publish the data for May on Wednesday.