Average asking prices for UK houses rose by £3,091 in February to £362,839, up 0.1% compared with this time last year, according to housing platform Rightmove.
The move upwards follows annual falls in every month since August 2023 and is a sign of growing momentum in the market, the property portal said.
Meanwhile, the number of sales agreed in the first six weeks of the year was 16% higher than in the same period last year, indicating that early-bird buyers feel that 2024 offers the right market conditions to move, despite high interest rates on mortgages.
Despite this optimism, the market remains price-sensitive, with many buyers very budget-conscious. Sellers who are over-optimistic and think that the more positive market sentiment will let them try asking for too high a price, risk being left on the shelf and missing out on the important spring moving season.
“Early-bird Boxing Day buyers got a head start in cherry picking from a record level of new property choice and have now been joined by many other buyers also believing that 2024 offers the right market conditions to move,” said Tim Bannister, director of property science at Rightmove.
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People looking to buy also have the luxury of more choice, compared with early-2023. During the first six weeks of 2024, the number of properties coming on to the market was 7% higher than the same period last year, while the number of buyers enquiring to estate agents was 7% higher. The number of sales being agreed is now 3% higher than at this time in 2019, as these numbers continue their transition towards more normal levels, Rightmove said.
A dual-speed market
Even with this momentum, there is a catch — buyers aren’t feeling the euphoria that swept the housing market during the covid-era stamp duty holiday.
Some agents report that properties that are accurately and competitively priced are being snapped up by budget-conscious buyers who are keen to make 2024 their year to move, having paused during the uncertainty of 2023. However, properties that are over-priced will immediately stand out against more competitively priced neighbours and are being left on the shelf by price-sensitive buyers.
As a result, it’s now taking sellers an average of 16 days longer to find a buyer than it did in 2023.
The time to find a buyer is at its slowest since 2015, excluding the initial lockdown months of April and May 2020, Rightmove added.
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Among groups that could need the most support going forward are first-time buyers, as activity levels and sales in this sector were the least improved compared to last year.
“There continue to be reasons for cautious optimism as we settle into 2024, with encouraging activity levels and a more stable housing market,” added Bannister.
The new data comes as UK inflation remains steady at 4%. The figure was the same as in December and came in below economists’ forecasts, including the Bank of England. Economists polled by Reuters expected prices to rise by 4.2% compared to the same month last year.
Inflation is one of the measures the Bank of England uses to determine its base rate.
Meanwhile, the average two-year fixed mortgage rate available to UK borrowers has fallen at the fastest monthly rate since the end of 2022, new data shows.
Moneyfacts reported that the average two-year fixed mortgage rate fell “significantly” in January, by 0.37%, its biggest monthly fall since December 2022.
Across all deposit sizes, the average two-year fixed-rate mortgage had a rate of 5.56% at the start of February 2024, down from 5.93% at the start of January this year.
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