House prices see biggest New Year bounce in three years

 

According to Rightmove

Many home-movers have already been putting their 2023 moving plans into action, with average asking prices seeing the biggest New Year bounce in three years.  The Rightmove monthly House Price Index has the most up-to-date monthly data on asking prices in England, Scotland and Wales, so you are able to see what’s happening in the housing market right now. This month the average asking price of a home in Great Britain rise by 0.9%, to £362,438. 

The price growth follows an uncertain final few months in the housing market in 2022, and two months of price falls in November and December. But average prices are still 2% lower (£8,720) than they were at their record peak in October last year.  

Asking prices usually increase in January, after the traditionally quiet home-moving period leading up to, and during the Christmas period. But this year’s price boost has been the biggest at this time of year since 2020.  

And it seems many home-buyers and sellers are ready to make their move. The 5th January was the third busiest day ever for people asking estate agents to value their home. And in the last two weeks, there’s been a 55% jump in the number of people contacting estate agents about homes listed on Rightmove, compared to the two weeks before.  

Property expert, Tim Bannister, says: “Given that the pause for Christmas came unexpectedly early last year, it was important to see whether buyers and sellers would pick up their plans again at the beginning of this year, or wait to see what the first few months might bring. The numbers certainly suggest that activity has bounced back after Christmas.” 

What’s the outlook for the 2023 housing market?

At the end of 2022, there was uncertainty around how much the property market would be affected by things like rising interest rates, inflation and the increasing cost of living. 

And though it’s early days, there are several signs of positivity as we head into 2023.  

We’re starting to see “familiar trends and a calmer, more measured market after the rapidly changing economic climate of the final few months of last year,” says Tim.  

“However, we expect that the full effect of affordability constraints and last year’s mortgage rate rises will hold back some segments of the market in the first half of the year. But there might be some green shoots of growth that will go on to strengthen in the second half of 2023,” he adds.  

In 2023, we’re forecasting that average asking prices will drop by 2%. To put that into context, this would mean average prices would be where they were in March 2022.

So, what does this mean if you’re thinking of selling?

Demand from home-buyers is down compared to last year’s busiest ever start to a year, but is up by 4% compared to the same period in the last ‘normal’ pre-pandemic market of 2019. 

And while more people have started listing their homes for sale in January, the number of available homes for sale is still well below the levels we’re used to seeing in a more normal housing market.  

However, if you’ve been putting off your plans to move until the New Year, the seasonal monthly increase in new seller asking prices is an encouraging sign.  

Tim says: “The early-bird sellers who are already on the market and have priced correctly are likely to reap the benefits of the bounce in buyer activity, while over-valuing sellers may get caught out as property stock builds over the next few weeks and months, and they experience more competition from other better-priced sellers in their area. Listening to your estate agent’s advice about your hyper-local market and pricing right the first time can avoid a stale sale and the need for even greater reductions later.” 

What are the local experts saying?

Gareth Overton, Head of Residential Sales at Henry Adams, has seen an increase in enquiries from both buyers and sellers at the start of 2023.  

He says: “Across our network of offices, we’ve certainly been cheered by the volume of sales activity immediately following the Christmas break. People are now looking ahead and putting their moving plans into action for the new year. 

Along with increases in viewing levels seen so far in 2023, we’re also receiving more requests for valuations. This bodes well for a reasonably balanced market in the months ahead, where supply and demand are more evenly matched.”