House prices go up as buyer demand dips

House prices rose by 0.8% in April to £373,971, adding £2,929 but falling short of the usual 1.2% increase normally seen for the month, Rightmove says.

The platform says the slower rise reflects higher mortgage rates and increased competition among sellers, with the number of homes on the market at an eleven-year high.

However, house price growth is not evenly spread and it is larger homes, those with four bedrooms or more, that are driving much of the increase.

Competitive pricing

Rightmove’s property expert, Colleen Babcock, said: “With mortgage rates remaining elevated due to the war in Iran, it’s not a surprise that price growth is proving strongest in parts of the market less exposed to higher borrowing costs, such as top-of-the-ladder homes, while sectors more exposed to interest rates are seeing slower momentum.

“Across Great Britain, Scotland stands out as an example of resilience, with average prices rising by over 4%.”

She added: “Lower average asking prices and a faster home-buying process continue to support price growth in the Scottish market.

“However, for most of the market, the combination of rising mortgage rates and the number of homes for sale being at its highest level for the time of year over a decade, means that competitive pricing is crucial for sellers looking to attract buyer interest and secure a sale this spring.”

Buyer demand falls

In Scotland, house prices climbed by 4.3%, outpacing other regions thanks to lower property values and quicker transactions.

Elsewhere, buyer demand in April is running 7% below the same point last year, based on enquiries to agents.

February and March showed the same gap, each down 7% year-on-year.

Sales agreed are 3% behind last year and new listings are just 1% lower than 2025, though still 13% ahead of 2024 levels.

Affordability improves

Wage growth is still feeding into affordability with average earnings up 3.9% year-on-year, while asking prices are 0.9% lower annually.
Borrowers are also accessing larger loans following adjustments to lending rules.

First-time buyer demand is down 6%, a smaller drop than the wider market.

Mortgage costs have seen the average two-year fixed rate at 5.42%, up from 4.25% before the war in Iran.

Property sector reaction to Rightmove house prices

Marc von Grundherr, a director of Benham and Reeves, said: “The combination of heightened geopolitical uncertainty and the increase in mortgage rates has understandably caused some buyers to pause for thought, particularly across the higher end of the market where affordability is already stretched.

“However, what we’ve seen is not a collapse in confidence, but a more cautious and considered approach from both buyers and sellers.”

Tom Bill, the head of UK residential research at Knight Frank, said: “The fact mortgage offers last for several months means the spike in borrowing costs has not fully kicked in yet for buyers.

“A seasonal increase in activity, combined with the fact that supply fell more notably than demand in response to the Middle East conflict, has kept upwards pressure on prices and prevented a cliff edge moment for the housing market.

“However, the inflationary shock of higher energy prices will put upwards pressure on rates and keep house prices in check for several months.”