While house prices have been declining towards the end of 2022, Rightmove’s latest house price index shows the average price tag for a house has in fact jumped by 0.9% - around £3,301 for a typical house.
Rightmove’s index shows the average asking price for a typical property in the UK is now £362,438 - which is 0.9% higher than in December 2022.
The increase follows two months of falls, so the average asking prices is in fact £8,720 lower than the peak reached in October.
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While other data points in the direction of house prices falling, Rightmove said the increase it has recorded is normal in January when activity in the market tends to pick up. Earlier this month, the Halifax House Price Index revealed that house prices fell for four months straight in the month ending December 2022.
And sellers are certainly returning, with Rightmove saying it saw an increase in enquiries made to estate agents, indicating that sentiment is possibly returning to the market following upheaval last year following Liz Truss’s mini budget.
Rightmove recorded that on January 5, the number of people sending a request to an estate agent to value their home was the third largest on its records.
Tim Bannister, Rightmove’s director of property science, said: “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.”
And although sellers are coming back, demand continues to outstrip supply, meaning the market continues to be under pressure.
“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 our leading market indicators may start to identify some green shoots of growth that will go on to strengthen in the second half of 2023,” Bannister added.
Tom Bill, head of UK residential research at Knight Frank, said this latest data shows confidence among buyers and sellers is returning.
“Rates increasingly reflect the process of normalisation that has taken place after 13 years of cheap debt and at some point in the near future it won’t be possible to blame last September’s mini-Budget for higher borrowing costs. While mortgage rates are declining gradually, they won’t get near the levels of this time last year. More buyers and sellers are returning to the market but there will be a reality check over the coming months as people recalculate what they can afford, which should see price declines become more widespread.”
What will happen to house prices in 2023?
It has been said by numerous experts that house prices will come down by around 8% later this year.
Although Rightmove’s data shows an increase, it is very likely that this is a seasonal uptick often seen at the start of a new year, but the long-awaited slump in housing prices is yet to take place in full force.
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