While it’s normal for house prices to rise in January following a quiet December, this price increase is the largest for January since 2020 and is more than double the 20-year average of +0.6 percent.
However, Rightmove reports that average new seller asking prices are still 0.7 percent lower compared to last year, reflecting how many new sellers are pricing more realistically as the property market recovers from recent mortgage rate spikes.
So far, it appears new sellers are more confident going into 2024 with the number of homes coming to market increasing as well as this month’s strong price increase.
Buyer activity has also jumped compared to the same period a year ago with the number of potential buyers contacting estate agents about homes for sale in the first week of 2024 five percent higher compared to last year.
Tim Bannister Rightmove’s director of property science said: “After a stop-start market in 2023, the initial signs suggest a smoother year for movers in 2024.
“More new sellers are now entering the market, and with more confident pricing. 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.”
The number of homes coming to market is 15 percent higher at the start of 2024 compared with 2023 with record numbers of sellers launching on Rightmove on Boxing Day.
The number of sales being agreed is also 20 percent higher compared to the same period last year thanks to sellers pricing more competitively to attract buyers.
What about mortgage rates?
The average five-year fixed mortgage rate now sits at 4.86 percent, compared to the peak of 6.11 percent in July last year.
While still high, the overall picture is more stable with some best-buy rates edging closer to four percent and the first Base Rate cut since 2020 expected later this year.
Tim added: “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.”
Chris Rowson, managing director at Sharman Quinney in Cambridgeshire said: “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 said: “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 which is unusual.
“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.”
