UK housing market shows strong start in 2024: Report

UK housing market: The UK housing market has demonstrated a robust beginning to the year, marking the most promising start since 2020, according to a survey by Rightmove released on Monday. The findings contribute to growing indications that the sector's slowdown could be abating, with increased demand observed in January.

Rightmove reported that the average asking prices for British homes, listed between December 3 and January 6, were 1.3 per cent higher than the previous month. This marks the most significant December-to-January rise since 2020, surpassing the typical increase for this time of the year. Traditionally, house prices in Britain tend to pick up at the start of January following a seasonal lull in the lead-up to Christmas.

Tim Bannister, Director of Property Science at Rightmove, remarked, "For now, the data at the start of 2024 points to building momentum, and reasons for growing market optimism."

The survey revealed a 20 per cent increase in the number of agreed sales during the first week of January compared to the same period last year. Additionally, buyer demand saw a 5 per cent uptick, and the number of homes entering the market increased by 15 per cent.

While British house prices experienced a surge exceeding 25 per cent during the COVID-19 pandemic, transactions slowed notably in late 2022 due to Prime Minister Liz Truss' budget plans causing turmoil in bond markets and subsequent increases in mortgage costs. However, average mortgage rates have since fallen from a peak of 6.11 per cent for a five-year fixed term in July 2023 to the current 4.86 per cent, according to Rightmove.

Despite the positive momentum, asking prices in Rightmove's January period remain 0.7 per cent lower than the previous year. Financial markets anticipate a potential rate cut by the Bank of England from the current 15-year high of 5.25 per cent in May.

While other indicators, such as a 1.1 per cent monthly increase in prices reported by Britain's largest mortgage lender Halifax, point to a rise in house prices, buyers may still feel the impact of elevated mortgage rates and the ongoing cost-of-living crisis. Tim Bannister also noted that while the housing market is gaining momentum, activity is likely to slow in the weeks leading up to the anticipated national election suggested by Prime Minister Rishi Sunak in the second half of this year.

(With Reuters inputs)