Property asking prices went up in January, according to Rightmove, following a busy start to the year for the housing market.
The price of homes new to the market rose by 1.3% month-on-month, it said, with the typical home listing for almost £360,000. This was the biggest December-to-January increase in prices since 2020, though average prices are still 0.7% lower than at this time last year.
Increase: Average new seller asking prices rose by 1.3% month-on-month with the typical home listing for almost £360,000
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The online property portal also reported increased activity among home buyers and sellers. It said the number of potential buyers contacting estate agents about homes for sale in the first week of 2024 was 5% higher than in the same period last year. The number of properties coming to market for sale was also 15% higher than at the start of last year, following a record number of sellers coming to market on Boxing Day.
The number of sales being agreed is also 20% higher at the start of this year than it was in the same period last year.
No January blues: Prices typically rise from a quiet December into a busier January, but this price rise is the largest for January since 2020, according to Rightmove
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Tim Bannister, a director at Rightmove, said "new sellers are confident about the outlook for the year ahead. After a stop-start market in 2023, the initial signs suggest a smoother year for movers in 2024. Rightmove's whole-of-market data puts us in a position to see the very earliest signs of activity in the market, and the number of new listings, buyer enquiries to agents, and sales being agreed are encouraging early indicators. Combined with our more recent mortgage in principle data, the numbers suggest that many are taking action to make their move in 2024, perhaps including some who paused last year due to the more unsteady mortgage market. More new sellers are now entering the market, and with more confident pricing."
The busy start to the year reported by Rightmove, chimes with a report from Reallymoving, a comparison site which is used by roughly one in ten UK home movers.
It claims new registrations for home move services, including conveyancing, surveying and removals, were 73 per cent higher in the first week of January than the same period last year.
Rob Houghton, founder and chief executive of Reallymoving, said 'It's encouraging to see a burst of home mover activity at the start of this year. People will only put their lives on hold for so long, and while the cost of borrowing is still a significant issue, it appears that many of those who held off in 2023 are now making the decision to go ahead, encouraged by the resilience of prices and some downward movement in mortgage rates as lenders compete for business."
It is still taking time to find a buyer
However, while Rightmove's latest report suggests that more buyers and sellers are keen to crack on with their plans this year, it appears sellers continue to find it hard to find a buyer.
On average it took 71 days for a seller to secure a buyer in December. This is a figure that has risen from an average of 55 days in July.
In December 2022, it was taking a seller 52 days to find a buyer - that's 19 days fewer than Rightmove reported it was taking last month.
Hard sell: On average it took 71 days for a seller to secure a buyer in December. This is a figure that has risen from an average of 55 days in July
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Rightmove's Tim Bannister added "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 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, and it's been proven that over-optimistic pricing makes a move much less likely.'
What are estate agents reporting?
Ultimately, the property market is made up of thousands of micro markets that will all be behaving differently from one another.
What is happening to asking prices or sold prices in one local area could be very different from what is happening in another location. Rightmove found that prices in the South East of England increased 2.4 % in January, for example, while in Scotland they declined by 1.2%.
Lower mortgage costs are encouraging more buyers back into the market, according to London estate agent Chestertons. They say 20% more people started their property search in December, when compared to December 2022, and 24% more offers for properties were submitted.
David Rees, research analyst at Chestertons, added "house hunters often utilise the holiday season to really focus on their property search and the falling interest rates appeared to give buyers more confidence to enter the market in December. This is good news for the market, but it's important to remember that despite this uplift, there are still far fewer buyers than there were before the Bank of England started raising interest rates."
Chestertons also noted that increasing numbers of homeowners are looking to sell, with the agency carrying out 15% more property valuations in December than in the previous year.
Rightmove found that prices in the South East of England increased 2.4% in January, while in Scotland they declined by 1.2%
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Chris Rowson, managing director at Sharman Quinney in Cambridgeshire says "things are looking up around him. It's certainly cold out there at this time of year, but the housing market is just heating up. We've had a really promising start to the year, with some very positive signs. 'Future sellers are getting their valuation appointments booked in, future buyers are enquiring and getting their viewings booked in and we're also seeing really high demand for mortgage appointments, as movers seek to understand their affordability and position at the start of the year. Most importantly, we're seeing offers being made, and a high number at that. It is early days and not a time to get carried away, but we've had a good start."
Paul Bayliss, director at The Square Room estate agents on The Fylde Coast in Lancashire also says "buyer confidence is improving where he is. It's been a busy January so far, which has actually followed a busy end to 2023 for us, even more so than over the summer. The key thing is mortgage rates, and with rates coming down from July and into the start of 2024, we can see buyers have got more confidence. We've seen a lot of activity from first-time buyers, now ready to make their move at the start of the year, and with mortgage rates more settled, we're also starting to see upsizers return who are now more confident to take out a larger mortgage for a bigger home. The market is just getting started, but we're optimistic about what 2024 can bring."
House prices will RISE 3% in 2024, says property firm as it backtracks on prediction of 4% fall
House prices will rise 3% this year, according to a major property firm. Estate agent Knight Frank had previously predicted a 4% fall by the end of 2024, but has flipped its forecast into positive territory on the back of falling inflation.
That prediction was made only three months ago, in October 2023 - but the agency said a significant drop in mortgage rates since then had changed its outlook. They also cited changing market expectations of what would happen to the Bank of England's base rate in the coming year.
By 2028, Knight Frank now predicts that house prices will increase by more than a fifth. They said 'in October, financial markets were pricing in a single interest rate cut of 0.25% by the end of 2024. By the end of last week, they were expecting five.
'The main reason for this changing outlook is that inflation is falling faster than expected. As a result, mortgage lenders have dropped their rates fairly significantly in recent weeks, partly to win business in a low-volume market. The best five-year fixed-rate mortgage is now under 4%, which was made possible after the five-year swap rate fell a full percentage point over the final quarter of 2023.
As a result of this more positive backdrop, we have revised our UK house price forecasts from three months ago."
Since 1 January, 44 lenders have cut rates on products. The best five-year fixed deal is now at 3.84% and the best two-year fix at 4.24%.
However, deals are being pulled quickly, with some mortgages from the Co-operative Bank only being available for three days. Knight Frank also pointed to recent house price indexes which have reported more positive numbers than previously forecast.
Fluctuations: This shows how house price indexes have moved compared to the five-year swap rate. Swap rates show what the financial markets think the future holds for interest rates
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Halifax reported a 1.7% increase in 2023 while Nationwide posted a fall of 1.8% - more positive than the 5 per cent decline that both had predicted in August. Knight Frank did say that London, one of its key markets, would see house prices rise less at 2% over the course of this year.
Looking further ahead, it forecast that house prices would rise by another 3% in 2025, followed by a rise of 4% in 2026, 5% in 2027 and 4% in 2028. In total, this adds up to an increase of 20.25% in five years' time.
However, Knight Frank said that those figures could be impacted by the outcome of the next General Election, as well as the ongoing conflict in the Red Sea, which could have an impact on global inflation.