It continues to be a ‘tentatively promising start to the new year as buyer and seller activity jump, pushing annual asking prices back into positive territory, with the average new seller asking prices increasing by 0.9%, or £3,091, this month to £362,839.

According to the data from Rightmove, the number of sales agreed in the first six weeks of the year is 16% higher than in the corresponding period last year. However, the market remains price-sensitive, with many buyers very budget-conscious.

The analysis shows that sellers who price right initially are far more likely to sell quickly.

Industry reactions:

Nathan Emerson, CEO of Propertymark, commented: “Our members continue to tell us that the market is gathering momentum, however, people continue to be money conscious. Only serious buyers and sellers are making a move after finding a middle ground in their affordability provided through a decrease in property prices helping combat rises in interest rates.

“Many other people are eagerly waiting in the wings ready for a change in interest rates to make it easier for them to move home or step onto the property ladder for the first time. Therefore, as soon as they start to fall, we should start to see a further rise in completions and offers.”

Simon Gerrard, managing director, Martyn Gerrard Estate Agent, commented: We’re certainly seeing a recovery of the housing market so far in 2024, and the figures today reflect the increased levels of registered interest in buying or selling homes that we’ve received. Calmer economic conditions and falling mortgage rates from several major lenders have made a considerable difference in people’s ability to purchase property. The recent figures showing that the UK economy is officially in a recession may worry some, but the Bank of England has held the base interest rate and hopefully, provided inflation remains under control, we will see the base rate dropped some time this year. When we do, growth will be the new normal and activity in the housing market is only set to increase.

“The real-time situation in the property market has perhaps been overshadowed by the recent government announcement that it would be relaxing planning rules and attempting to boost development in urban areas. But we’ve heard this from the government before, and time and time again these policies have fallen into the void of meaningless soundbites that have no real action to back them up.

“The government’s pledge to force local councils to cut red tape and favour development is laughable. It has failed for over a decade to bring local councils and planning inspectorates in line, leading to a market that is presided over by these NIMBY councils whose primary aim is to block any increase in housing stock at every opportunity, propped up by a government that is too weak to take action. The churn of ministers in charge of the housing brief has only shown that the government doesn’t care about building homes, and it clearly has no understanding of how to actually encourage development.”

Nigel Bishop of buying agency Recoco Property Search, said: “We have seen first-hand that buyer confidence has returned to some degree, particularly if compared to this time last year. This uplift in market activity is largely driven by the availability of more affordable mortgage products but also falling inflation. Equally, sellers have become more motivated to put their property up for sale which is resulting in buyers having a larger pool of properties to choose from.

“House hunters at the higher end of the market, of homes priced £2mn and above, however, are generally less dependent on a mortgage and remain cautious amid the potential impact of this year’s election and upcoming Spring Budget. Cash or chain-free buyers who are currently making an offer are less likely to settle on the seller’s asking price and willing to enter tough price negotiations.”

Adam Feather, managing director of Robert Anthony Estate Agents, said: “Following a turbulent market in 2023, there are growing signs that this will be a smoother year for those looking to buy and sell properties. More new vendors are now entering the market, with many adopting increased price expectations as a result of greater demand from buyers. However, it is important that sellers remain realistic when setting their asking price.”

Michelle Niziol, CEO at IMS Property Group in Oxfordshire, said: “It’s been a positive start to the year, particularly when compared to the slower pace of this time last year. There’s a sense of optimism, helped hugely by mortgage rates dropping in recent months, which now seem to have settled and remained stable, giving prospective buyers assurance and confidence. With lower mortgage rates on offer and more properties for sale, now is a good opportunity for any would-be buyers out there. Despite the affordability constraints, we are still seeing a good level of activity in the first-time buyer market, which is encouraging the next time buyers to review their situation and supporting movement further up the property ladder. There is a good audience of buyers out there for properties priced well, also providing opportunities for those looking to sell.”

Kate Eales, deputy head of residential at Strutt & Parker, commented: “The start of this year has seen renewed optimism and positive sentiment in the wake of a further pause in interest rates and January inflation held at 4%. Optimism breeds confidence, and confidence is translating into more sellers and buyers coming into the market. Activity is trending upwards compared to this time last year, which is encouraging, but the market remains price sensitive. Motivated sellers need to be realistic with listing prices and take advice on how to effectively position their sale in the current market. Buyer’s budgets are still being largely constrained by expensive mortgage products, so it’s a careful balance.”

Jimmy Waight, head of Sales at John D Wood & Co, added: “We are witnessing a good start to the year in London’s property market, with buyers acting earlier than usual. The surge in activity can be attributed to the decreasing and now stabilising mortgage rates, which have prompted many individuals who postponed their moves last year amid uncertainty to now re-emerge. The current momentum is further underscored by an increase in registered buyers year-to-date compared to the same period last year. This positive trend suggests a renewed confidence in the market, and as we move into spring, we anticipate a continued upward trajectory in both buyer interest and property transactions.”

Property asking prices rise for second consecutive month, says Rightmove