Rightmove said the flat asking prices suggested sellers were being more realistic about property values, adding that the lack of a sharp fall was positive for the market. Annually, asking prices were up by 3.9%. 

Tim Bannister, Rightmove’s director of property science, said: “The big question this month was whether we would see new sellers increasing their asking prices as has been the yearly norm as we approach the spring selling season.  

“This month’s flat average asking price indicates that many sellers are breaking with tradition and showing unseasonal initial pricing restraint. In addition to market conditions demanding greater realism on price, we are transitioning into a slower-paced market, where buyers will take longer to find the right property at the right price due to the higher cost of servicing a mortgage.” 

On average, it took sellers 62 days to secure a buyer in January, up from 52 days in December. 

Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “Sellers are keeping a lid on asking prices. Usually at this time of year they’re gearing up for the spring selling season with punchy pricing. This year they’re well aware that over-pricing at this stage will mean they could miss out on the spring rush, and face cutting their prices as the market slows in the summer.” 

Purchase activity returns 

Despite the unchanging average asking price, the Rightmove house price index for February showed that the level of buyer demand began to recover. The number of people getting in touch with agents in the last two weeks rose 11% compared to the same period in 2019, when the market was more normal. 

The number of sales agreed also improved to be just 11% down on 2019’s levels, which was better than the 15% decline recorded in January. It was also up on the 30% drop in activity following the mini Budget. 

Rightmove said this was a “remarkable turnaround” considering the sharp rise in average mortgage rates. It noted that although first-time buyers had been hardest hit, sales in this sector were holding up and were just 7% lower than 2019. 

Sales made to owner occupiers were down 16% which Rightmove said was due to “hyper-local and sector differences”. 

Coles said the numbers of buyers agreeing a sale was still down but there was a “good chance” that mortgages were holding the market up. 

“Buyers know rates are on the way down, and they’re not in a hurry to fix their rate any higher than they need to. The problem for the market is that if everyone holds off for just a few months, buyers may be forced to cut their asking prices to get a sale over the line, which could mean prices fall despite mortgage rates coming off the boil,” she added. 

A calmer market 

A lack of property supply remained in February, with the number of available homes down by 24% compared to 2019. However, this is a 48% rise on the record low levels of property availability seen across 2022, and Rightmove said the slower-paced, higher-choice market was better suited to buyers who tended to lose out to those using cash.

Bannister said: “The frantic market of recent years was unsustainable in the long-term, and our key indicators now point to a market which is transitioning towards a more normal level of activity after the market turbulence at the end of last year. Agents are reporting that they are now increasingly seeing buyers who have more confidence and more choice albeit with revised budgets to accommodate higher mortgage rates.  

“It’s a positive sign for the market to see many in the first-time buyer sector getting on with their moves, though despite average mortgage rates having edged down, some first-time buyers will still be priced out of their original plans and may need to look for a cheaper property, save a bigger deposit, or factor higher monthly mortgage repayments into their budgets.”