After two months of consecutive falls on property prices, the average new asking price has risen again by 0.9% (+£3,301) for the month of January 2023! This is the biggest increase seen at this time since 2020.

The average asking price is still lower by as much as £8,720, since their peak in October 2022. But there are some signs of positivity within the property market, especially since the start of the year.

  • The number of prospective buyers contacting agents has risen by 4%.
  • January 5th has seen many seller’s enquire with estate agents, showing an early sign of a confident year ahead.
  • The average monthly mortgage payment for first-time buyers continues to fall as mortgage rates are softened, with first-time buyers now seeing mortgage deals below 5%.

The strong start to the property market has been welcomed by the industry. The rise of 0.9% (+£3,301) has pushed the average property price in the UK to £362,438.

After a few uncertain months at the end of 2022 in the property market, the familiar season when sellers feel more confident to start putting their property on the market, is showing signs of some stability resuming within the property market.

It’s still early days, but this is a more encouraging start to the year than many anticipated.

“The seasonal increase in new seller asking prices this January from December is particularly encouraging for movers who are looking for the reassurance of familiar trends and a calmer, more measured market after the rapidly changing and at times chaotic economic climate of the final few months of last year. However, while average asking prices did rise in January, they are still £8,720 less than their peak in October. The early-bird sellers who are already on the market and have priced correctly are likely to reap the benefits of the bounce in buyer activity, while over-valuing sellers may get caught out as property stock builds over the next few weeks and months, and they experience more competition from other better-priced sellers in their area. It will be important for the vast majority of sellers to remember that a drop in your asking price is likely not an actual loss compared with what you paid for it, only a failure to live up to aspirations. Listening to your estate agent’s advice about your hyper-local market and pricing right the first time can avoid a stale sale and the need for even greater reductions later.”

Tim Bannister Rightmove’s Director of Property Science

At the beginning of the year, buyer demand is up by 4% compared with the same period in the last “normal” pre-pandemic market of 2019. The bounce-back in activity this January was bigger than usual this year, following an extended year-end lull. The number of prospective buyers sending an enquiry to an estate agent about a property for sale jumped by 55% in the last two weeks, compared with the previous two weeks, an indicator of pent-up demand. In recent years, this New Year jump in enquiries has been around 45%, and it was last higher than this in 2016, a potentially positive sign for the year ahead.

However, buyer demand is down by 36% compared to last year’s busiest ever start to a year, as the market navigates its return to a more normal level of activity.

On 5th January, the number of people sending a request to an estate agent to value their home, typically the first step for a future seller, was the third largest on record, an early sign of market confidence. Indeed, the last week has been the busiest for these home valuation requests since August 2022. However, even with the prospect of more sellers coming to market, the number of available homes for sale is still well below long-term norms.

Average monthly mortgage payments for hard-pressed first-time buyers continue to fall as mortgage interest rates soften, with some deals on offer below 5%. Further easing of mortgage interest rates this year may tempt more first-time buyers to send enquiries to estate agents and begin the process of a 2023 move.

“These statistics based on the largest sample of any UK housing report give reasons for some positivity at the beginning of 2023. Given that the pause for Christmas came unexpectedly early last year, it was important to see whether buyers and sellers would pick up their plans again at the beginning of this year, or wait to see what the first few months might bring. The numbers certainly suggest that activity has bounced back after Christmas and agents will now be busy trying to match the likely revised expectations of buyers and sellers as we move towards the important spring season. We expect that the full effect of affordability constraints and last year’s mortgage rate rises will hold back some segments of the market in the first half of the year, but our leading market indicators may start to identify some green shoots of growth that will go on to strengthen in the second half of 2023.”

Tim Bannister Rightmove’s Director of Property Science