UK housing market ‘starts new year with a bang’, says Rightmove | Housing market

A record number of new sellers have come on to the UK housing market since Boxing Day, while the average price and the number of sales agreed also increased, pointing to a busier 2025, according to a report.

The average price of a property coming to market rose by 1.7%, or £5,992, this month to £366,189, the biggest jump in prices at the start of the year since 2020, the property website Rightmove said in its monthly report. While prices usually bounce back in the new year after a seasonal fall in December, before Christmas, the rise was pronounced this month.

Buyers are understood to be more comfortable bidding for homes in response to falling interest rates, which could fall more steeply this year after official figures showed inflation fell in November by more than expected to 2.5%.

Values were still almost £9,000 below May 2024’s all-time record, though, reflecting affordability constraints among some buyers.

The number of new properties coming to market was 11% higher than a year earlier while the number of buyers contacting agents about properties for sale since Boxing Day is 9% ahead of last year, and the number of sales being agreed over the same period is up by 11%.

The average number of homes listed for sale for every estate agency branch is at the highest for this time of year in 10 years, and sellers are competing to attract new year buyers. Some sellers may find that they have been too optimistic on their initial pricing and get left on the shelf, Rightmove said.

“New sellers have started the year with a bang,” said Colleen Babcock, property expert at Rightmove. “We’ve also seen a strong start to the year in new seller asking prices, though given the higher-than-anticipated seller competition, we would expect this to slow down over the next few months.”

The firm is forecasting a larger number of transactions this year of 1.15m, and an average asking price increase of 4%.

However, there are uncertainties ahead, including the pace and number of interest rate cuts from the Bank of England, and the impact of changes to stamp duty from 1 April, affecting smaller homes, typically acquired by first-time buyers.

First-time buyers in cheaper parts of England will largely be unaffected by a fall in the tax-free threshold to £300,000 from April. However, stamp duty charges rising for those buying above the threshold will be a drag in more expensive areas, unless some additional help for first-time buyers is announced soon, Rightmove said.

Mortgage rates have remained relatively high, as fixed-rate deals below 4% all but disappeared in recent months. Rightmove’s weekly mortgager tracker shows that the average five-year fixed mortgage rate is now 4.75%, little changed from 4.78% this time last year. While the average two-year fixed mortgage rate has improved, it is still 4.97%, down only slightly from last year’s 5.08%.

After the surprise drop in UK inflation in December and meagre economic growth in November, interest rate expectations shifted in financial markets, which are now pricing in two or three quarter-point cuts this year. A sell-off in UK and other government bonds 10 days ago pushed their yields, effectively the interest rate, sharply higher, although those rises were then reversed in a rollercoaster week.

Tom Bill, the head of UK residential research at the estate agent Knight Frank, said: “Demand is likely to come under pressure in coming months as the impact of higher borrowing costs feeds through to mortgages. In addition to the pace of Bank of England rate cuts, what happens on bond markets in the early weeks of Donald Trump’s presidency will have a fairly direct bearing on UK house prices this year.”