Asking prices on newly-listed homes rose 1.3% to £359,748, in the biggest December to January increase in prices since 2020.
The rise equates to a £4,571-increase month-on-month but average prices are still 0.7% lower than at this time last year, according to Rightmove.
The number of properties coming to market for sale is also 15% higher than at the start of last year, with the North East and South West seeing the greatest addition of new choice for the increased number of new buyers.
The property site said the jump in the number of properties coming to market and the strength of this month’s price rise show that new sellers are more confident about the outlook for the year ahead
“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,” Tim Bannister Rightmove’s director of Property Science, said.
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“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,” he added
The number of sales being agreed is 20% higher at the start of the year than in the same period last year as many sellers are pricing more attractively.
“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,” Chris Rowson, managing director at Sharman Quinney in Cambridgeshire, said
“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,” he added.
Rightmove has also seen a surge in the number of prospective buyers beginning the process of securing a mortgage in principle as borrowing costs ease.
The average 5-year fixed mortgage rate is now 4.86%, compared to the peak of 6.11% in July last year. As some best-buy rates edge closer to 4%, and a first Base Rate cut since 2020 is expected later this year, there is overall a more stable backdrop for the mortgage market than at this time last year.
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“A General Election is expected to be held during the second half of 2024, and traditionally we see a temporary slow-down in activity in the weeks before an election, as movers wait for the outcome and assess any impact that it may have on their housing plans.
“It will be important to keep a careful eye on this and on the impact of other economic news this year, but for now the data at the start of 2024 points to building momentum, and reasons for growing market optimism,” Bannister said.
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