"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
Despite prices typically rising from a quiet December into a busier January, this month's increase of 1.3% for the price of property coming onto the market is the largest for January since 2020, and more than double the 20-year average of +0.6%.
According to Rightmove's latest data, the record jump equates to £4,571 and sees the average price of property entering the market hit £359,748.
Average new seller asking prices are still 0.7% lower than last year, highlighting that many new sellers are being realistic about their expectations as the market continues to recover from the impact of volatile mortgage rates.
However, the jump in the number of properties coming to market and the strength of this month’s price rise also show that new sellers are more confident about the outlook for the year ahead. Rightmove’s early snapshot of buyer and seller activity since the start of the year is tentatively promising for those looking to get their 2024 moving after a hesitant 2023.
Rightmove’s Tim Bannister explains: “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 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.”
Whilst it’s an early snapshot of 2024, both buyer and seller activity have jumped compared to the same period a year ago, indicating a return of confidence when compared with the unsettled post-mini-budget period.
The number of potential buyers contacting estate agents about homes for sale in the first week of 2024 was 5% higher than in the same period last year, with the growth in activity strongest in London and the North East.
The number of properties coming to market for sale is also 15% higher than at the start of last year, following a record number of sellers launching on Rightmove on Boxing Day. The North East and South West have seen the greatest addition of new choice for the increased number of new buyers.
There remains no glut of homes for sale, with the total number of available properties just 1% above the more normal market levels of 2019. However, it is vital that those who are keen to sell price competitively, even with this new buyer activity, as the number of properties coming to market is outpacing the rise in the number of buyers enquiring.
The most positive early indicator for 2024 is that the number of sales being agreed is 20% higher at the start of the year than in the same period last year. This also shows that many sellers are pricing attractively enough to tempt buyers who were hesitant to commit a year ago when the outlook for mortgage rates and buyer affordability was much more uncertain.
Since the 27th of December, Rightmove has seen nine of its ten busiest days for prospective movers beginning the process of getting a Mortgage in Principle, to see how much they are likely to be able to borrow from a lender, and therefore the type of home that they may be able to afford.
January is on course to be the busiest month for people getting a Mortgage in Principle on Rightmove since that service was launched in 2022. Whilst it is still early days, this is another positive sign of future movers getting their 2024 budgets and plans in place.
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.
Tim Bannister comments: “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.
"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.
He concludes: "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.”
Paul Bayliss, Director at The Square Room Estate Agents on the Fylde Coast adds: “It’s been a busy January so far, which has 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 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.”
Nathan Emerson CEO of Propertymark comments: “Sellers will no doubt be happy that their homes have increased in value month on month despite the challenging economic situation.
“Serious buyers continue to complete on their homes, but what we now hope is that this increase, combined with lower interest rates could encourage those homeowners who have been holding back on their next home move due to previous economic turmoil.
“It is now vital that the UK Government continues working towards reducing inflation to increase momentum in the market.”
