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UK property website Rightmove reported a 1.7% rise in average asking prices for newly listed homes between December 8 and January 11, reaching GBP 366,189. This marks the highest January increase since 2020 but remains GBP 9,000 below the May 2023 peak. Despite rising property listings and buyer inquiries, affordability concerns persist due to high mortgage rates and uncertainty around interest rate cuts. The market's outlook hinges on potential Bank of England rate reductions, with expectations of a cut from 4.75% to 4.5% in February. The upcoming expiration of tax relief on lower-priced homes in April may also influence buyer sentiment.
British property website Rightmove reports that newly listed homes in Britain saw their most significant January price increase since 2020 though market sentiment remains cautious due to uncertainty around interest rate reductions. The average asking price for properties new to the market increased by 1.7% between December 8 and January 11, reaching GBP 366,189 ($445,944). This figure remains GBP 9,000 below the market peak observed in May 2023, though it represents a 1.8% increase compared to the same period last year. Advertisement
The housing market showed signs of recovery in 2023, buoyed by expectations of falling borrowing costs. However, the slower-than-anticipated pace of interest rate reductions has somewhat dampened market enthusiasm. Despite this, several positive indicators have emerged since December 26 with new property listings up 11% year-over-year, buyer inquiries to agents increasing by 9% and agreed sales also rising by 11%.
Rightmove's head of partner marketing, Colleen Babcock noted that while the year has started positively, many potential buyers continue to face affordability challenges due to high mortgage rates. An additional concern for the market is the upcoming expiration of a reduced property purchase tax rate on lower-priced homes in April, which could impact buyer behavior. Babcock emphasized that sustained market momentum would require support from early and continued reductions in the Bank of England's base rate, which could help lower mortgage rates. Market observers anticipate that the Bank of England will reduce its Bank Rate from 4.75% to 4.5% at its next monetary policy meeting on February 6.
The overall picture suggests a housing market showing signs of recovery but still facing significant challenges, with both buyers and sellers watching interest rate developments closely for signals about future market conditions.
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