May Market Update

With four Bank Holidays behind us and the smell of barbeques in the air, late spring is almost over. It’s about now that movers jostle for position ahead of high summer. Here’s how the market looks after a mad May.

Average asking price increased: sellers were full of confidence. Rightmove’s latest House Price Index showed the asking price for newly-listed homes increased +1.2% (+£4,333). The new average asking price is £378,304.

North-South divide persisted

Stellar rises in some regions: sentiment strength depended on where you were in the UK. Asking prices increased the most in the North East (+2.7%) and the North West (+2.6%). Sellers revised downwards in London (-2.4%) and the South East (-1.6%).

Pricing caution issued

Unsold & reduced trends noted: among the asking price optimism were warnings from two property portals. Rightmove said 32% of homes for sale had a price reduction due to over-optimistic pricing. It added that reduced-price homes took 91 days longer to sell than properties that were priced well from the start.

Sellers losing out: Zoopla qualified how much reductions were costing sellers. Its analysis found the average home sold for 3.5% below the asking price (during the first 3 months of 2026). That’s equal to £18,000 below the original advertised figure.

Misplaced confidence recognised: Zoopla’s research saw it question more than 2,000 UK adults who had tried selling in the last three years. The results found 44% failed to find a buyer. More than a third (34%) looked back and realised they’d priced too high, while 16.2% knew they’d overpriced before they started selling. For 53%, dropping the asking price was the only way to attract a purchaser.

Renting cheaper than buying: in May, Rightmove declared it was cheaper to rent than to buy with a new mortgage. It said tenants were £123 better off each month, thanks to rising mortgage rates. But for how long?

Rents continue to climb: the market changes quickly, however. HomeLet’s May rental index revealed rents are rising. New tenancies increased +1.1% in the last monitoring period, with a new average monthly rent of £1,340. Mortgage rates also decreased.

Landlord confidence

An upbeat outlook: a joint report issued by Pegasus Insight and Foundation revealed things are looking up for landlords. Its latest quarterly Landlord Trends report found yields had edged up to 6.5%. The number of landlords planning to stay in the sector also rose (from 58% to 63%), while 84% of landlords reported a profitable lettings operation.

Buy-to-let remains an investment strategy: Handelsbanken’s annual Property Investor Report added to the positive picture. The research was carried out after the start of the Iran conflict for a true sentiment snapshot. Of the UK real estate investors, property management professionals and landlords polled, 93% expect their portfolio’s value to rise over the next year, while 84% plan to increase their portfolio holdings. Only 1% said they would exit the market entirely in the next 12 months.

Energy costs back in focus

Price cap announcement: we all noted how gas and electricity costs increased in line with the Iran conflict but the end of May brought further energy news. Ofgem announced the price cap would increase 13% on 1st July 2026. It blamed the crisis for the hike.

Desire to offset costs: buyers are taking action as a result, with 93% saying energy uncertainty is shaping what they look for in a home. The research by E.ON Next found 60% said the current energy market had prompted them to seek a property with solar panels, while 61% want a home with EV charging capabilities. Meanwhile, 70% report they’re searching for a house with a heat pump.

If you would like to know more about your local property market, please get in touch.