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Large properties boost Britain's housing market despite high interest rates

Property.
Property. Copyright Canva.
Copyright Canva.
By Eleanor Butler
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Property prices rise to a near-record level in April, although buyers seeking smaller homes still face affordability challenges.

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The average asking price for a home in Britain has risen by 1.1% in April, according to property firm Rightmove.

This brings the approximate cost of a property to £372,324 (€432,619), only £570 (€662) less than the record set in May 2023.

Compared with the same period last year, asking prices are up +1.7%, the highest annual growth rate seen in 12 months.

That said, the monthly pace of price rises is cooling slightly, down from March's reading of +1.5%.

The trend is predominantly "driven by an increase in the average asking price of 'top-of-the-ladder' homes, which are typically the highest-priced properties," said Rightmove.

Excluding inner London houses, prices were up 2.7% month-to-month for four-bedroom, detached properties and larger dwellings.

In terms of non-detached, four bedroom houses and all three bedroom properties, prices were up +0.9%.

For smaller dwellings, the monthly growth rate was almost flat, at +0.3%

Rightmove's findings suggest that Britain's housing market is picking up after a stretch of damp demand.

With the UK's base interest rate held at 5.25%, higher mortgage costs are still pricing many buyers out of the housing market, although those searching for larger properties are likely to be less sensitive to higher rates.

The number of new sellers coming to the market is up by 12% compared with this time a year ago, while the number of sales being agreed is up by 13%

Many potential sellers are hoping that an interest rate cut from the Bank of England, now expected in the summer, will further boost demand for properties.

Barclays, HSBC and NatWest all increased some costs on fixed-rate mortgages on Tuesday, showing that affordability concerns still persist.

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