House sales prices rose almost £6,000 last month according to Rightmove, in the biggest new year rise since 2020.
Sales prices for new homes on the market rose by 1.7 per cent on average or £5,992 in the month to January 11, with the typical property now trading for £366,189.
However, asking prices remain almost £9,000 below the May 2024 record, reflecting buyers’ tight budgets.
And price rises may begin to slow soon, as Rightmove said a record number of sellers had put their homes on the market since Boxing Day.
The number of new properties coming to the market is 11 per cent higher than the same period last year, meaning buyers will be spoiled for choice and sellers may need to adjust their asking prices to compete.
It also said the number of buyers contacting agents to put their home on the market since Boxing Day was 9 per cent higher than last year, and the number of sales agreed during the same period was up 11 per cent. hundred.
For Sale: Asking prices have seen a rebound in the last month as more sellers come to the market.
The glut of homes on the market is likely to prevent sellers from setting ever-higher prices this year, according to Colleen Babcock, a property expert at Rightmove.
‘The record number of sellers we are seeing is a double-edged sword. “It is encouraging to see so many sellers with the confidence to come to the market, offering buyers new options,” he said.
‘However, with so many homes for buyers to consider, sellers will have to work even harder to stand out from the crowd and attract a buyer.
‘This could be with a tempting asking price, outstanding features of the home, impeccable presentation of the home or a combination of all of these.
“It is vital in a competitive market that sellers follow the recommendations of their agents, especially when it comes to setting a realistic price.”
Mortgage rates tighten buyers’ budgets
Another reason sellers will need to restrain themselves from setting sales prices too firmly is rising mortgage rates.
Mortgage rates are not expected to drop significantly for some time, and in the near term they are more likely to rise.
This is due to uncertainty over the pace and number of future interest rate cuts by the Bank of England.
Yesterday, four major mortgage lenders announced they would be increasing fixed mortgage rates on all fixed products.
It means that unless things change, most buyers will continue to get mortgage rates of between 4.5 and 5 per cent this year.
On average, buyers get a rate of 4.75 per cent on five-year fixes and 4.97 per cent on two-year fixes, according to Rightmove.

Mortgage rates remain elevated, which means buyers are readjusting their real estate expectations.
On a £300,000 mortgage fixed over two years, that means the average buyer will pay £1,748 a month over a 25-year repayment term.
“Many buyers are still on the edge of their affordability, with high mortgage rates restricting borrowing power and limiting what they can afford to pay,” Babcock added.
“The market needs a boost for that momentum to sustain, in the form of early and continued bank rate cuts, which should hopefully help reduce mortgage rates.”
Jeremy Leaf, a North London estate agent and former chairman of Rics residential, added: ‘There is one thing that is valued more than any other when it comes to buying a home – and that is stability. Stability builds confidence to take on longer-term debt and return home.
‘Demand remains strong but concerns remain, not so much about the likelihood of a reduction in interest rates but about the pace of their fall, as well as the budgetary implications for the labor market later this year.
‘As a result, some buyers are hitting the pause button, especially as there are many more property options as these figures demonstrate. However, the underlying desire to move has not disappeared.’
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