Housing market gains momentum at start of 2024

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The average price of homes put on sale between December 3 and January 6 was 1.3% higher than the month before, the biggest December to January increase since 2020 and more than double the average rise for this time of year, Rightmove said

Average asking prices for British homes made the strongest start to the year since 2020, according to a Rightmove survey on Monday that added to signs that the downturn in the sector could be easing as demand rose in January.

The average price of homes put on sale between December 3 and January 6 was 1.3% higher than the month before, the biggest December to January increase since 2020 and more than double the average rise for this time of year, Rightmove said.

House prices in Britain typically rise at the start of January after a lull in the run-up to Christmas.

For now the data at the start of 2024 points to building momentum, and reasons for growing market optimism, Tim Bannister, director of property science at Rightmove, said.

Rightmove said the number of agreed sales was 20% higher in the first week of January compared to the same period in 2023, and buyer demand was 5% higher. The number of homes coming to the market increased 15%.

British house prices soared during the pandemic, rising by more than 25% according to official data.

But transactions slowed sharply in late 2022 after then-Prime Minister Liz Truss’ budget plans caused turmoil in bond markets, which increased the cost of mortgages, while increasing BoE rates acted as a brake through 2023.

Asking prices in Rightmove’s January period are still 0.7% lower than the year before.

Average mortgage rates have dropped, however, from a peak of 6.11% for a five-year fixed term in July 2023 to 4.86% now, Rightmove said.

Financial markets expect the Bank of England to start reducing rates from their current 15-year high of 5.25% in May.

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