House prices start New Year on the rise, says Rightmove

While market buoyancy is expected, this is the biggest monthly increase at this time of year since 2020.

Compared to last month, average asking prices for UK homes rose by over £3,300 in the New Year, according to Rightmove, a real estate company. This comes after house prices declined in the final two months of 2022.

“Whilst a rise in asking prices is expected in January, this is the highest at this time of year since January 2020,” Rightmove confirmed in a statement.

“After the market’s uncertain final few months of 2022, this familiar seasonality is a tentative sign of stability,” it continued.

Despite the rise this month, average asking prices are still more than £8,700 below their peak in October. With further homes set to be listed on the market in the coming months, it is crucial for sellers to not overvalue their home, said Tim Bannister, Director of Property Science at Rightmove.

“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,” he said.

Although Rightmove expects more sellers to come onto the market, the number of available homes is still below the long-term average.

Demand, meanwhile, was down by 36% when compared to 2022’s New Year. However, this was the busiest start to a year on Rightmove’s records, and came at a time when mortgage rates were still at record lows, according to Moneyfacts data.

The difference between mortgage rates last year and today is explained further in an article written last week.

Compared to 2019, which Rightmove describes as “the last ‘normal’ pre-pandemic market of 2019”, demand this January is up 4%.

“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,” said Bannister.