Optimistic home sellers raise asking prices, says Rightmove

Asking prices of new homes for sale rose 0.9 percent in January as optimistic sellers entered the market, Rightmove has revealed.

And despite a mortgage crisis slowing the real estate market, the number of potential buyers contacting real estate agents rose 55 percent compared to the two weeks before Christmas.

The rise is the biggest New Year’s jump since 2016, after a prolonged drop in activity late last year.

However, according to Rightmove’s report, the total number of inquiries is down by more than a third (36 percent) compared to the same time last year.

In the year to January, house prices rose by 6.3 percent.

The average asking price for a home in the UK is now £362,438, up 0.9 per cent from December. It also shows a reversal in the downward trend after house prices fell 2.1 percent between November and December.

Regionally, house prices in the South East rose by 0.1 per cent over the past month, while in Scotland they fell by 5.2 per cent.

On an annual basis, Yorkshire and Humberside saw the largest increase in average house prices, up 9.5 per cent, while the South West saw the lowest growth of 3.4 per cent.

For first-time buyers, the average house price rose just 3.9 per cent in the 12 months to January and 0.4 per cent since December, bringing the figure to £222,582.

At the top of the house ladder, the average house price is now £656,322, up 5.2 per cent over a year and 1.3 per cent month-on-month.

Tim Bannister, Director of Property Science at Rightmove, said: ‘The seasonal increase in asking prices from new sellers in January from December is particularly encouraging for movers seeking the reassurance of familiar trends and a calmer, more measured market following the rapidly changing and on the chaotic economic climate of the last months of last year.

Although average asking prices have increased in January, they are still £8,720 less than their October high.

It will be important for the vast majority of sellers to remember that a drop in your asking price is probably not a real loss compared to what you paid for it, but merely an inability to meet your aspirations.

“Listening to your broker’s advice about your hyperlocal market and pricing right the first time around can help you avoid a stale sale and the need for even bigger discounts later on.”

There is also good news as monthly mortgage payments for first-time buyers have fallen as mortgage rates continue to fall from last October’s highs.

The average two-year fixed rate is now 5.63, up from 5.79 on January 1, according to Moneyfacts.

The five-year average with a fixed interest rate also fell from 5.63 at the start of the month to 5.43.

Most experts now expect rates to be somewhere between 4 and 5 percent this year, with many firm deals now below 5 percent despite a succession of base rate increases.

This is Money’s best mortgage interest calculator can show you the deals you can request and what they would cost.

However, data from Nationwide last week showed that homes for first-time buyers are the least affordable since 2008, as mortgage payments eat up 39 percent of borrowers’ salaries.

Gareth Overton, head of residential sales at broker Henry Adam, said: ‘People are now looking ahead and putting their New Year’s move plans into action.

“As mortgage rates begin to fall and inflation comes under control, we are seeing an increase in demand from those who have a long-term view of investing in their next home.

“In addition to the increase in ratings seen so far in 2023, we are also getting more requests for appraisals. That bodes well for a reasonably balanced market in the coming months, where supply and demand are better aligned.’