Average new seller asking prices rose by 1.3% to £359,748 in the month to January, the biggest monthly increase in prices at the start of the year since 2020, data from Rightmove shows.
The number of new properties coming to market for sale is 15% higher than the same period a year ago, while buyer demand in the first week of 2024 is 5% higher the same period last year, as mortgage rates ease.
The number of sales agreed is 20% higher than during the first week of last year, “indicating a strong return of buyer confidence when compared with the unsettled post-mini-Budget period a year ago”, according to the property website’s monthly House Price Index.
It points out that the average five-year mortgage rate is now 4.86%, compared to 6.11% at the July 2023 peak.
The survey says: “While there may be more surprises to come, early indicators suggest a more stable year for the mortgage market after its volatility from September 2022 onwards.”
However, it adds that average selling prices are still 0.7% lower than at this time last year.
Rightmove director of property science Tim Bannister says: “After a stop-start market in 2023, the initial signs suggest a smoother year for movers in 2024.
“More new sellers are now entering the market, and with more confident pricing. While the increased level of buyer activity that we’re also seeing may justify some of this increased pricing confidence from sellers, it’s important that sellers who are keen to find a buyer don’t get carried away with New Year’s enthusiasm when setting their price expectations.
“Elevated mortgage rates and the wider cost-of-living squeeze are still limiting buyers’ spending power. Accurate and realistic pricing for their local area is the recipe for success for sellers looking to get moving in 2024.”
MT Finance director Tomer Aboody points out: “As rates seem to finally be easing and buyers getting more comfortable with affordability, confidence seems to be returning to the market.
“Reduced inflation is helping potential buyers manage their finances, allowing them the flexibility and comfort to be able to move.
“As the cost of borrowing looks as though it will come down further in 2024, a further uptick and strength in the housing market is expected.”
The Mortgage Lender chief commercial officer Steve Griffiths adds: “The latest Rightmove House Price Index results appear to be moving on from where they left off, with sellers raising their asking prices in order to compete with others on the market.
“Though seasonally, winter tends to be a more trying time for those looking to sell, the increase in house prices marks an end to 2023’s overall slower growth trajectory.
“That being said, recent moves to reduce mortgage rates and a subsequent increase in buyer demand is seeing the frost of winter melt away and buyers and sellers alike can look forward to renewed confidence in the market which should prompt more activity as a result.”
