The average price of a house coming to market in the UK rose by £5,992 to £366,189 in January, according to online platform Rightmove’s (RMV.L) house price index — the largest jump in prices at the start of the year since 2020.
Price rises come alongside a record number of early-bird new sellers coming to market since Boxing Day, giving buyers the highest level of choice at the start of a year since 2015.
Buyer activity is up too — the number of buyers contacting agents about properties for sale since Boxing Day is 9% ahead of last year, and the number of sales being agreed over the same period is up by 11%, Rightmove said.
High buyer choice has contributed to increases in buyer enquiries and sales agreed compared to a year ago, but also means fierce seller competition to attract these new year buyers.
Some sellers may find that they have been too optimistic on their initial pricing and get left on the shelf in favour of more competitively priced neighbours, Rightmove said.
“It’s encouraging to see so many sellers with the confidence to come to market, providing buyers with fresh choice. However, with lots of homes for buyers to consider, sellers will need to work even harder to stand out from the crowd and attract a buyer,” said Colleen Babcock, property expert at Rightmove.
“This could be with a tempting asking price, standout home features, immaculate presentation of the home, or a combination of all of these. It’s vital that in a competitive market, sellers take on the recommendations of their agent, particularly when it comes to setting a realistic price.”
Mortgage rates are also affecting the market, and mean many buyers are not seeing significant affordability improvements.
Rightmove’s weekly mortgage tracker shows that the average five-year fixed mortgage rate is now 4.75% compared with 4.78% at this time last year.
While the average two-year fixed mortgage rate has improved, it is still 4.97%, down only slightly on last year’s 5.08%.
There have been changing messages on how many interest rate cuts to expect from the Bank of England this year, which are causing some uncertainty and will prevent some potential buyers from joining in the new year enthusiasm.
While asking prices are rising and the number of sellers rises, the cost of a house still some way off all-time highs — £9,000 below May 2024’s record, reflecting buyer affordability constraints.
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