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House Price Index January 23

The largest monthly sample of residential property prices and housing market activity

Bigger than usual New Year bounce after extended yearend lull

  • After two months of falls, average new seller asking prices rise again by 0.9% (+£3,301) this month, the biggest increase at this time of year since 2020 as New Year sellers test the market: 
  • However, average asking prices are still £8,720 lower than their peak in October It’s early days, but there are some signs of positivity in the first few weeks of the year: 
  • The number of prospective buyers contacting agents is up 4% compared to the same period in 2019, and up by 55% compared with the two weeks before Christmas, the biggest New Year bounce since 2016 after the extended lull at the end of the year
  • However, the number of enquirers is down by a third compared to the buoyant market of this time last year
  • Would be sellers jump into action with 5th January the third busiest day ever for people asking agents to come out and value their home, an early sign of confidence for the year ahead
  • Average monthly mortgage payments for hard pressed first interest rates soften, with some deals now on offer below 5%

 

After two months of falls, the average price of property coming to the market for sale rises again by 0.9% this month (+£3,301) to £362,438. Whilst a rise in asking prices is expected in January, this is the highest at this time of year since January 2020. After the market’s uncertain final few months of 2022, this familiar seasonality is a tentative sign of stability, with new sellers feeling confident to test the market, albeit at average asking prices that are 2% below October 2022’s record. It’s still early days, but this is a more encouraging start to the year than many anticipated. 

At the beginning of the year, buyer demand is up by 4% compared with the same period in the last “normal” pre-pandemic market of 2019. The bounce-back in activity this January was bigger than usual this year, following an extended year-end lull. The number of prospective buyers sending an enquiry to an estate agent about a property for sale jumped by 55% in the last two weeks, compared with the previous two weeks, an indicator of pent-up demand. In recent years, this New Year jump in enquiries has been around 45%, and it was last higher than this in 2016, a potentially positive sign for the year ahead. However, buyer demand is down by 36% compared to last year’s busiest ever start to a year, as the market navigates its return to a more normal level of activity. On 5thJanuary, the number of people sending a request to an estate agent to value their home, typically the first step for a future seller, was the third largest on record, an early sign of market confidence. Indeed, the last week has been the busiest for these home valuation requests since August 2022. However, even with the prospect of more sellers coming to market, the number of available homes for sale is still well below long-term norms. Average monthly mortgage payments for hard-pressed first-time buyers continue to fall as mortgage interest rates soften, with some deals on offer below 5%. Further easing of mortgage interest rates this year may tempt more first-time buyers to send enquiries to estate agents and begin the process of a 2023 move.

Affordability trends

The first Monday 16th January 2023 time buyer monthly mortgage payment is based on Bank of England data of the averages for 90% LTV two year fixed mortgages from lenders, and t he average asking price of a typical first-- time buyer home (two bedrooms or fewer) using the Rightmove House Price Index. The equivalent monthly rent is calculated using the same property types (two bedrooms or fewer).

The affordability to buy a first home is based on the Average Weekly Earnings (AWE) dataset from ONS multiplied by 4.5 to get the typical maximum that a person can borrow from a lender . buyer home is taken from the Rightmove House Price Index.

Regional trends