Biggest January rise for house prices since pandemic

House prices have had their biggest January increase since before the pandemic, according to Rightmove, yet the number of homes for sale is historically low

Illustration of four houses on a green background
(Image credit: Getty images)

UK house prices have seen their biggest January jump since before the pandemic after rising 0.9%.

It means the average price tag on a home jumped by £3,301 in January, following some dips at the end of 2022, according to a property website Rightmove (opens in new tab).

Across Britain the average asking price is now £362,438, which is 0.9% higher than in December, Rightmove said.

January’s increase in the typical price tag on a newly-marketed property follows two months of falls, with average asking prices now £8,720 lower than a peak reached in October.

Rightmove said that a rise in asking prices would normally be expected in January.

Tim Bannister, Rightmove’s director of property science, said: “The seasonal increase in new-seller asking prices this January from December is particularly encouraging for movers who are looking for the reassurance of familiar trends and a calmer, more measured market after the rapidly changing and at times chaotic economic climate of the final few months of last year.

However, while average asking prices did rise in January, they are still £8,720 less than their peak in October 2022.

“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.”

The data also revealed a surge in prospective buyers sending inquiries to estate agents about homes – in a sign of pent-up demand.

But the number of homes for sale remains 'well below' historical levels despite the prospect of more sellers coming to market, according to the data.

“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,” acknowledges Bannister. “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.”

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Katie Binns

Katie is staff writer at The Money Edit. She was the former staff writer at The Times and The Sunday Times. Her experience includes writing about personal finance, culture, travel and interviews celebrities.  Her investigative work on financial abuse resulted in a number of mortgage prisoners being set free - and a nomination for the Best Personal Finance Story of the Year in the Headlinemoney awards 2021.