Asking prices for an average new seller increased by 0.9% in February to £362,839, data from a property listing site showed.
According to the Rightmove house price index, this was the first time in six months that asking prices had risen annually and, compared to last year, asking prices are 0.1% higher.
Compared to the previous month, average asking prices rose by 0.9%.
Rightmove said the number of agreed sales over the last six weeks was 16% higher than last year and 3% up on 2019. The firm said this suggested that buyers felt this was a good time to move. It noted that the market was still price-sensitive and any seller with too high an asking price was at risk of not securing a sale.
The time to find a buyer is at its slowest since 2015, at 78 days, and 16 days longer than this time last year.
Rightmove said buyers were able to take their time and consider whether properties were right for them. The firm said sellers who priced right the first time were more likely to find a buyer quickly.
As well as a rise in asking prices and agreed sales, there are more properties coming to market, the data showed.
According to Rightmove, there was a 7% uptick in homes being put up for sale compared to the same period last year, and buyers making enquiries was also up by 7%.
Tim Bannister, director of property science at Rightmove, said: “We said that February would be an important indicator for the year ahead, and the question was whether the Rightmove Boxing Day bounce in buyer activity would keep its spring into March or lose momentum. It’s proved to be the former, with the number of sales agreed continuing to considerably outstrip last year.
“Early-bird Boxing Day buyers got a head start in cherry-picking from a record level of new property choice, and have now been joined by many other buyers also believing that 2024 offers the right market conditions to move.”
He added: “Mortgage rates have fallen considerably from their peak and are now remaining broadly stable after the uncertainty of late 2022 and 2023. Momentum to move in 2024 is continuing to build, but prospective sellers mustn’t get carried away. Buyers now have more choice of property for sale and many are still very price-sensitive, with mortgage rates remaining elevated.”
Confidence back in the property market
It was suggested that the calmer property market was restoring confidence in buyers and sellers.
Tomer Aboody, director of MT Finance, said: “As confidence starts to creep back into the market due to the reduction in mortgage rates and lower inflation, we are seeing higher sales volumes, with vendors encouraged to sell.
“Encouragingly, while sales have picked up, vendors are pricing correctly in order to attract buyers. This, in turn, is making a property purchase more affordable and appealing to buyers. Unless there is some dramatic intervention from the Government, we don’t expect to see a huge increase in pricing in the forthcoming 12 months or so.”
Ben Waugh, managing director at More2Life, said: “The new year was marked by increased confidence across the market as many high-street lenders announced cuts to their existing residential mortgage rates. However, while today’s Rightmove house price index results indicate that house prices have increased slightly since December, the picture for the market remains a little more complex than it did last month. Recent volatility in swap rates has meant that some lenders are now repricing upwards, which may leave buyers with the question of whether now is the right time to take a step onto the property ladder.
Increases to borrowing costs could also compound the affordability challenges faced by the over-55s, whose fixed incomes are often affected most by sustained inflationary pressure. It is vital that these individuals seek out the support of a financial adviser, who can have comprehensive conversations about their needs and the suitability of products across the market.”
First-time buyer assistance
Bannister said the first-time buyer sector was most in need of Government help in light of the upcoming Budget, saying buying activity and sales in this market was the least improved compared to last year.
He added: “There continue to be reasons for cautious optimism as we settle into 2024, with encouraging activity levels and a more stable housing market. While some would-be buyers will continue to be affected by elevated mortgage rates and major affordability constraints, many other prospective buyers who can afford to do so have acted fast and demonstrated their belief that 2024 is their year to get moving. It is still early days for 2024, with a Budget, general election and no doubt more global events still to play out.
“With the Budget up next, the Government will be considering a range of options to support movers, and we expect to hear more policy rumours as the date approaches. Rightmove’s whole-of-market data shows that it’s the first-time buyer segment who could use the most support this spring, and well-thought-out initiatives to help to get more would-be first-time buyers onto the ladder would be welcome.”
