The UK housing market experienced its most significant surge since 2020, with a record number of new properties listed in January, according to data released by property website Rightmove.
In January, average house prices saw a 1.7% increase compared to the previous month, marking the largest rise at the beginning of the year since 2020. This comes after a 1.7% decrease in December. On an annual basis, the growth rate of house prices accelerated to 1.8% in January from 1.4% in December.
In addition, buyers benefitted from the widest selection of properties since 2015, as a record number of new sellers entered the market post-Boxing Day. There were 11% more properties listed compared to the same period in the previous year.
According to Rightmove property expert Colleen Babcock, "We've observed a robust start to the year in terms of new seller asking prices. However, due to higher-than-anticipated competition among sellers, we anticipate a slowdown in the coming months." Rightmove projects a total of 1.15 million transactions this year, with an average asking price increase of 4%.
Babcock also highlighted potential uncertainties in the market, such as the frequency and magnitude of future interest rate reductions and the effects of increased stamp duty for many home-movers starting April 1st.
Matt Smith, a mortgage expert at Rightmove, noted that the recent strong inflation figures came quickly after news of high government borrowing costs, emphasizing how rapidly market sentiments can shift. "While the markets are still expecting a rate cut in February, there remains uncertainty beyond that," Smith remarked. "We may need more time to determine the trajectory of interest rates this year."
In December, the Bank of England maintained its benchmark Bank Rate at 4.75%, following quarter-point reductions in both August and November.
