UK Property Prices Increase After Three Months of Stagnation

Asking prices for UK property rose for the first time in three months in January, easing concerns that the market was headed for a prolonged slump.

Rightmove said on Monday that prices sought by sellers surged 0.9% in January, after declines in the previous two months. This was the largest gain for this time of year since 2020, and boosted average prices by £3,301 ($4,022) to £362,438.

Rightmove reported a 55% increase in potential buyer inquiries in the past two weeks, the biggest New Year bounce since 2016. This contrasts with data from mortgage lenders, which show that the cost of property sold has dropped for four consecutive months, the longest slump since 2008.

According to Tim Bannister, Rightmove's director of property science, the data "give reasons for some positivity at the beginning of 2023." He notes that 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.

He warned that "over-valuing sellers may get caught out" as the inventory of properties for sale increases in the coming months. Asking prices remain below the peak reached in October, by £8,720 on average.

The number of prospective buyers contacting agents has increased in recent weeks. Compared to the same time last year, there has been a 4% increase in the number of buyers contacting agents. There has also been a 55% increase in the number of buyers contacting agents compared to the two weeks before Christmas.

The number of people inquiring about homes was down 36% compared to the start of last year, when the market was still strong following Covid lockdowns.

Bannister warned that rising prices could pose a risk to the market. He said 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."

Asking prices for homes in the UK rose by an average of 0.8% in August, according to the latest figures from Rightmove. The monthly rise was most notable among "top of the ladder" sellers, whose asking prices climbed by 1.3% to £656,322.

It took buyers an average of 52 days to find a seller in December, up from 45 the month before. This is the longest it has taken since February 2021, and is up from as little as 31 early last year. Rightmove said that 60 days is in line with longer-term norms.

Asking prices in London have increased by 6.1% over the past year, with sellers taking an average of 67 days to find a buyer.