Rightmove: Property market shows a promising start with increase in buyers and sellers
The average price of a property hitting the market rose by 1.3% in January, according to new figures. Property website Rightmove said the cost of a house being put up for sale this month was £359,748.
Although prices typically rise from a quiet December into a busier January, the agent said the increase was the largest for January since 2020. However, average new-seller asking prices are still 0.7% lower than last year, Rightmove said, as sellers are realistic about their expectations amid volatile mortgage rates.
But the jump in the number of properties coming to market - and the strength of this month’s price rise - show new sellers are more confident about the outlook for the year ahead, according to Tim Bannister, Rightmove’s director of property science. He 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."
In more positive news, 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, the data showed, 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, with the north east and south west seeing the greatest addition of new choice.
While the number of homes for sale sits just 1% above the more normal market levels of 2019, there are bargains still to be had, 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, showing sellers are pricing attractively enough to tempt buyers who were hesitant to commit a year ago.
And, since December 27, Rightmove said it has seen nine of its 10 busiest days for prospective movers beginning the process of getting a mortgage in principle. Currently, the average five-year fixed mortgage rate is at 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 in 2023.
"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," Tim said.
"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.
"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."
Chris Rowson, managing director at the Sharman Quinney estate agent in Cambridgeshire, said the market was heating up in the winter. He said: "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."
And 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."