Property asking prices are rising for the second month in a row, Rightmove says, as buyers get back on board

According to the latest data from Rightmove, average asking prices increased by 0.9 percent this month to £362,839.

The data, which looks at the prices of newly listed homes, reported a rise of 1.3 percent in January. This means the typical asking price has risen by almost £8,000 since December.

It was also 0.1 percent higher than this time last year – marking the first time in six months that the year-to-date figure has not been negative.

The change was caused by more buyers and sellers entering the market, the real estate website said.

It reported that there were 7 percent more new listings coming onto the market in February than last year, and a 7 percent increase in the number of buyers inquiring.

It also said that agreed sales in the first six weeks of 2024 were 16 percent higher than the same period last year, and 3 percent higher than before the pandemic in 2019.

Rival website Zoopla reports similar findings in its data. According to the report, homebuyer demand in January was 12 percent higher than the same period last year.

Where are the hot housing markets?

Rightmove said the number of buyers rose in all parts of Britain, but London was clearly leading the way, followed by the North East and North West regions.

It also said the flow of new homes for sale was 10 percent higher than a year ago and the highest since 2020.

It reported that new sellers are listing their homes in the East of England, the South West and the North East at the fastest pace.

In practice, real estate agents also endorse these findings, with many reporting a positive start to the year.

Michelle Niziol, CEO of IMS Property Group in Oxfordshire, said: ‘The start of this year has brought renewed optimism and positive sentiment in the wake of a further interest rate pause and inflation held at 4 per cent in January.

“Optimism breeds confidence, and confidence translates into more sellers and buyers entering the market.”

Kate Eales, deputy head of housing at estate agent Strutt & Parker, added: ‘We are witnessing a good start to the year in the London property market, with buyers taking action earlier than normal.

‘The current momentum is further underlined by an increase in the number of registered buyers since the beginning of the year compared to the same period last year.

“This positive trend signals renewed confidence in the market, and as we enter spring, we expect a continued upward trajectory in both buyer interest and real estate transactions.”

The February data follows a report from Rightmove last week that a record number of homeowners contacted an estate agent to have their home valued in January.

Meanwhile, the latest property market survey from the Royal Institution of Chartered Surveyors (Rics) also revealed that estate agents and surveyors are seeing increasing inquiries from buyers and more sellers are entering the market.

Tim Bannister, director of property science at Rightmove, said: ‘We said February would be a key indicator for the year ahead, and the question was whether the upturn in buyer activity on Rightmove Boxing Day would continue the spring in March or lose momentum .

‘The former appeared to be the case, with the agreed number of sales remaining significantly higher than last year.

‘Early-bird Boxing Day buyers got a head start on cherry-picking with a record of new real estate choices and have now been joined by many other buyers who also believe 2024 offers the right market conditions for moving.’

Bannister is one of many real estate industry experts who believe mortgage rates are now low enough to bring buyers and relocators back into the market.

Although the average two- and five-year fixed mortgage rate remains above 5 percent, the cheapest five-year fixed mortgage rates for people with more equity remain just under 4 percent, according to Moneyfacts.

The lowest rate for someone buying with a 20 percent down payment is currently 4.34 percent, while the lowest rate for someone buying with a 10 percent down payment is 4.47 percent.

Someone who needs a £200,000 mortgage, buys with a 10 per cent deposit and secures the lowest interest rate over a 25-year term, can expect to pay £1,108 a month.

“Mortgage rates have fallen significantly from their peaks and are now broadly stable following the uncertainty of late 2022 and 2023,” Bannister added. “The momentum to move in 2024 continues to grow.”

Are home sellers’ prices too high?

Although the real estate market appears to be heating up, many sellers may be pricing their homes a little too optimistically, meaning many homes are failing to generate interest.

It’s taking more than two weeks longer to find a buyer than this time last year, with the average sales time at its slowest since 2015, excluding the initial pandemic lockdown months of April and May 2020.

Sellers are advised to price correctly from the start if they want to sell quickly.

“Potential sellers shouldn’t get carried away,” says Bannister. ‘Buyers now have more choice of properties for sale and many are still very price sensitive, while mortgage rates remain high.

“Sellers serious about moving this year would be wise to anticipate this wave of increased buyer confidence with an attractive asking price before any pre-election jitters or unexpected events dampen momentum.”

Rightmove says agents are reporting that competitively priced properties are being snapped up by price-conscious buyers keen to make 2024 their moving year, after pausing during the uncertainty of 2023.

However, if they are too expensive, there is a good chance that they will remain stuck on the market and the asking price will have to be reduced.

Fellow agents Hamptons revealed earlier this week that a whopping 48 per cent of homes sold in England and Wales in January were subject to a price reduction.

Michelle Niziol of IMS Property Group said: “The market remains price sensitive.

‘Motivated sellers should be realistic with list prices and seek advice on how to effectively position their sales in the current market.

“Buyers’ budgets are still largely limited by expensive mortgage products, so it’s a careful balance.”