The housing market has kicked off the new year with a strong start following a significant rise in prices. According to Rightmove, the average home price has increased by nearly £9,900 to £368,031 since December. This 2.8% surge represents the largest January increase in Rightmove’s 25-year history and the most substantial month-on-month growth since June 2015.
Rightmove attributed this market rebound to Chancellor Rachel Reeves’ Budget announcement at the end of November, which dispelled previous rumors and uncertainties that had slowed down market activity.
Despite the positive momentum, Rightmove cautioned potential sellers about the challenging market conditions. The number of homes available for sale is currently at its highest level for this time of year since 2014, with a third of listed properties experiencing price reductions. Market conditions vary across regions, with some areas experiencing price falls, such as the East Midlands and Scotland.
Buyer interest surged in the weeks following Christmas, with a 57% increase in inquiries to agents and an 81% spike in newly listed properties. This rise in demand can be attributed to decreasing mortgage rates, as major lenders have recently implemented significant rate cuts.
Colleen Babcock, a property expert at Rightmove, noted that sellers are now more confident in listing their homes at higher prices, with buyer activity also on the rise. However, she advised sellers to set realistic asking prices and consider market conditions, given the high number of homes for sale and the prevalence of price reductions.
Myles Moloney, director at Chase Buchanan estate agents in London, highlighted the busy market and the demand for homes that meet specific criteria such as proximity to good schools and modern living spaces. He emphasized the importance of well-priced, well-presented homes that cater to the needs of modern families in attracting buyer attention.
Overall, the housing market’s positive start to the year is driven by increased buyer demand, improved affordability through mortgage rate cuts, and sellers’ growing confidence in listing their properties at higher prices.