House prices surge in January, marking largest monthly rise since pandemic – The Intermediary

The UK property market experienced its most significant month-on-month increase in house prices since the pandemic, with a 1.3% rise in January 2024, bringing the average house price to £359,000.

According to Rightmove’s analysis, this increase offers a “tentatively promising” outlook for the new year, although prices remain 0.7% below those of the previous year.

In London, however, there was a 4% monthly decrease in house prices, setting the average cost of a home at £664,000.

Despite this regional contraction, the overall market shows positive trends. Buyer demand in the first week of 2024 was 5% higher than the same period last year, and the number of sales agreed upon was 20% higher, indicating a rejuvenated interest among prospective buyers.

This surge in market activity coincides with falling mortgage rates, further buoyed by a mortgage price war initiated by high street lenders, offering deals below 4%.

Tim Bannister, Rightmove’s director of property science at Rightmove, said: “After a stop-start market in 2023, early signs point to a quieter year for movers in 2024.

“Rightmove’s cross-market data enables us to identify the earliest signs of activity in the market and the number of new listings, inquiries from buyers to agents, and agreed sales are encouraging early indicators.

“Combined with our more recent fundamental mortgage 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 unstable mortgage market.

“Now more and more new sellers are entering the market, with more confident pricing.”

Reaction

Tomer Aboody, director of property lender MT Finance:

“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.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman: 

“It’s premature to say whether the recent improvement in activity will translate into a strong market recovery during early 2024, but certainly the initial signs are encouraging.“In our offices, we’ve seen a similar picture to that painted by the Rightmove survey. No New Year fireworks, but more valuations, viewings, listings and offers than this time last year.

“The mortgage rate war and improvement in lender appetite, combined with lower inflation and a strong jobs market, have helped to fuel expectations that prices may have passed their low point and more balance between supply and demand lies ahead.”

Nathan Emerson CEO Propertymark:

“Sellers will no doubt be happy that their homes have increased in value month on month despite the challenging economic situation.   

“Serious buyers continue to complete on their homes, but what we now hope is that this increase, combined with lower interest rates could encourage those homeowners who have been holding back on their next home move due to previous economic turmoil.  

“It is now vital that the UK Government continues working towards reducing inflation in order to increase momentum in the market.”