According to property website Rightmove, asking prices for homes in the UK increased by the highest amount this year in May. The average price rose by 1.8% from April, driven by a more positive economic outlook and steady mortgage rates.

This growth in confidence may be due to the fact that earlier predictions of a downturn in the housing market have proven unlikely as the economy has shown resilience and avoided a recession. While borrowing costs have eased since a peak in September, they remain higher than before the financial market turmoil in the autumn.

Rightmove also reported a 3% increase in buyer demand compared to May 2019, before the impact of the coronavirus pandemic. However, other indicators have provided a mixed picture, with some suggesting slower growth in property prices.

The Resolution Foundation estimates that 1.6 million households in the UK will face an average increase of £2,300 in their fixed-rate mortgage bills as these deals mature over the next year.