The average price of property coming to market has risen by 1.7% (£5,992) this month to £366,189, the largest jump in prices at the start of the year since 2020, according to the Rightmove House Price Index.
New seller asking prices were still nearly £9,000 below May 2024’s record, reflecting buyer affordability constraints.
The number of new properties coming to market was 11% ahead of the same start-of-the-year period last year.
The number of buyers contacting agents about properties for sale since Boxing Day was 9% ahead of last year, and the number of sales being agreed over the same period is up by 11%.
Mortgage rates remained sticky, with Rightmove’s weekly mortgager tracker showing that the average 5-year fixed mortgage rate was 4.75%, compared with 4.78% at this time last year.
Colleen Babcock, property expert at Rightmove, said: “New sellers have started the year with a bang, with a record number coming to market not only on Boxing Day itself, but across the start of the year to date.
“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 record number of sellers we’re seeing is a double-edged sword. It’s encouraging to see so many sellers with the confidence to come to market, providing buyers with fresh choice.
“However, with lots of homes for buyers to consider, sellers will need to work even harder to stand out from the crowd and attract a buyer.
“This could be with a tempting asking price, standout home features, immaculate presentation of the home, or a combination of all of these.
“It’s vital that in a competitive market, sellers take on the recommendations of their agent, particularly when it comes to setting a realistic price.”
Babcock added: “It’s important to look at the bigger market picture, despite the positive early lead indicators that we’re seeing.
“Many buyers are still affordability-stretched, with high mortgage rates restricting borrowing power and limiting what they can afford to pay.
“Meanwhile, first-time buyers have seen support schemes reduce and some also face higher stamp duty fees from April, all while contending with record rents and trying to save up for a deposit.
“Rightmove’s early-year snapshot shows a promising start to 2025.
“However, the market needs a boost for that momentum to be sustained, in the form of early and ongoing Bank Rate cuts, which should hopefully help to reduce mortgage rates.
“Some further support for first-time buyers would also be welcomed, particularly in more expensive areas of the country.”
Matt Smith, mortgage expert at Rightmove, said: “The message around how many Bank Rate cuts we should expect this year keeps changing, creating some uncertainty for movers.
“News of high government borrowing costs was swiftly followed by better-than-expected inflation figures, highlighting how quickly the mood can change.
“The markets are still banking on a cut in February, but after that it becomes uncertain.
“I think we’ll need to get settled into the year a little more before the direction of travel for rates this year becomes clearer.”
Reaction:
David Morris, head of homes at Santander UK:
“While 2025 has started confidently, with Rightmove’s latest data showing a record number of mortgage in principle applications and the highest number of new property listings for a decade, a continued rise in property prices and stubborn interest rates continue to prevent many would-be buyers from entering the market.
“However, we have a right to be cautiously optimistic for the year ahead with suggestions that we may soon see less volatility in swap rates, and subsequent calming in mortgage interest rates.
“What’s more, with the Government and regulator holding welcome discussions on ways to reduce affordability constraints, opening-up mortgage borrowing to more potential buyers, 2025 is shaping up to be a pivotal year for homeownership.”
Peter Lawrence, founder at Lawrence Rand in Ruislip:
“As we step into 2025, the housing market is already showing signs of robust activity, with demand from buyers increasing year on year.
“This growth is fuelled by a combination of economic stability, renewed consumer confidence, and slightly more favourable lending conditions.
“The supply side of the market is also showing encouraging trends, with a good level of new instructions coming onto the market for sale.
“Sellers are responding to the strong buyer demand and stable property prices, taking advantage of an opportune moment to list their homes.
“This healthy balance between supply and demand is fostering a dynamic marketplace, benefiting both buyers and sellers.
“If mortgages rates reduce notably, it could be a positive year ahead.”
Jordan Halstead, CEO at Jordan & Halstead Estate Agents:
“We have high hopes for a strong year in 2025, with a larger pipeline of sales compared with the start of last year.
“We expect a solid first three months in exchanges and completions.
“After the cold snap we’ve just had, viewings, offers and sales being agreed are picking up again at a solid rate.
“Sellers seem to be listening to our valuation recommendations more than previously, I think this down to expectations being more realistic, and an understanding that mortgage costs are now much higher.
“Lending is still a challenge with uncertainty in interest rates, but there is still hope mortgage rates will come down. This is causing some buyers to hesitate, hoping they will get a better deal.
“All in all, we expect a better year than 2024, but know that challenges are still ahead, with a lot riding on the government and Bank of England being consistent in their approach.”
