May's unusual heatwave brought the summer market forward earlier than usual this year, and the World Cup may prove to be a further distraction for home-movers over the coming months. Wider economic uncertainty also continues to weigh on the market.
Buyer demand across May was down 10% year-on-year, although this remains broadly in line with the pattern seen so far this year. Higher mortgage rates continue to squeeze many household budgets, while the wider choice of homes for sale is giving buyers less reason to rush unless a property stands out on price or presentation.
The number of newly listed homes is down 5% compared with this time last year, a further sign that the market is settling into its typical seasonal rhythm slightly earlier than usual. That said, listings remain higher than in recent years, up 6% on 2024 and 12% on 2023:
- Sales agreed are down 6% year-on-year
- Activity remains broadly in line with recent years
- Levels are virtually the same as 2024 and around 5% above 2023
- Mortgage rates edge down slightly
Mortgage affordability has improved a little this month. Rightmove's daily mortgage tracker shows the average two-year fixed rate has fallen to 5.07% from 5.18% last month, cutting the average monthly mortgage payment by around £30.
"While the summer market has come a bit early this year, overall activity is still within a typical historic range," Babcock said.
"What has changed is some buyer behaviour, with more homes to choose from and higher borrowing costs, buyers are deliberating more and taking longer over their decisions. Sales activity remains stable, but it's a very price-sensitive market with buyers looking out for the right property at the right price.
"It's encouraging to see another slight reduction in average mortgage rates this month, which is a small step in the right direction for affordability and market sentiment. While rates remain elevated, even modest changes can make a difference to buyers' budgets and confidence."
Matt Smith, Rightmove's mortgage expert, said it was encouraging to see rates edging down. "It's encouraging to see mortgage rates edging down slightly, and even relatively small reductions can make a difference to buyers' budgets," he said.
"While rates remain higher than the lows of recent years, they have been relatively stable over a sustained period, which is helping to provide more certainty for those planning a move. There is still some underlying volatility in the economic and global market, which means rates could move slightly in either direction from here.
"However, the key takeaway for buyers is that we're currently in a period of greater stability than we've seen previously, and that stability can help support confidence, particularly for those who are close to affordability limits and weighing up their next step."
