Across May as a whole, typical vendors achieved 99.1% of their asking price. That’s the highest share since October last year, and the third strongest May on record, according to Hamptons.

It is sellers of one‒ and two-bedroom properties that have seen the smallest fall from asking price to achieved price, said Hamptons, with vendors of larger properties more likely to have to accept a bigger drop from the asking price.

Small homes sell more quickly

Smaller homes were also found to be selling more quickly. On average, homes took 49 days to sell, the longest sales period recorded in a decade.

However, the analysis found that two-bed homes typically went under offer in 43 days, three days faster than the average three-bed property. That’s the first time two-bed homes have sold quicker than three-beds since 2010.

Hamptons also suggested there has been heightened competition for smaller properties. More than a quarter (27%) of studio and one-bed properties had three or more competing offers, up by one per cent from last year.

‘FTBs buying smaller homes’

Aneisha Beveridge, head of research at Hamptons, argued that the driver behind increased appetite for smaller properties had been the mortgage market upheaval, and specifically the increases in interest rates.

She explained: “With affordability stretched, first-time buyers are buying smaller and so too are early downsizers with the aim to pay off their existing mortgage. This is supporting pricing for one and two bed homes, while the larger family home market has cooled more over the last year given how costly it is to trade-up.”

Beveridge noted that falling mortgage rates in recent months had boosted confidence among buyers and seller alike, but warned that the last two weeks of rate increases “runs the risk of freezing some buyers out of the market”.

“Although, rates are unlikely to return to their Q4 2022 peak which means that we don’t expect a significant change in the market in the months ahead,” she concluded.