The smallest increase in home asking prices since February of 1992

woman perusing real estate listings

The smallest increase for a month since Rightmove's records began in 2001, the average asking price for a home in the UK increased by just £14 from January to February.

Currently, a home is being offered for £362,452, according to the report.

The beginning of the year typically sees an increase in asking prices as sellers get ready for the spring selling season.

Price tags do, however, vary, and in some of the months of the previous year, like November and December, they did fall.

According to Rightmove, rising mortgage rates and living expenses were limiting people's options. Following months of declining home prices, there are now forecasts for further drops this year and the following.

Tim Bannister, director of property science at Rightmove, reacted to the most recent data by saying that "many sellers are breaking with tradition and showing unseasonal initial pricing restraint.".

Buyers were taking more time to "find the right property at the right price," he continued, and they wanted "greater price realism.".

According to the building society Nationwide, the UK's housing market had been in decline for five straight months until January.

While this was happening, annual house price growth slowed to 11% from 28% in December.

The reason partially stems from rising mortgage rates that have reduced purchasing power. Although rates are now lower than the 6 point 65 percent highs experienced after Liz Truss's mini-budget in September, they are still significantly higher than they were a year ago.

Average fixed-rate mortgages for two and five years are still above five percent, according to the research firm Moneyfacts.

Budgets for households are under pressure as inflation, or the rate at which prices rise, is close to a 40-year high.

In spite of this, Rightmove claimed that consumers were benefiting from "more choice, even if with revised budgets to accommodate higher mortgage rates.".

Despite improving, the company reported that the number of sales agreements was still 11 percent below 2019 levels. Following the mini-budget, they had experienced a 30% decline.

And according to Knight Frank's head of UK residential research, Tom Bill, the housing market has improved somewhat since Christmas.

Due to the volatility brought on by the mini-budget, buyers and sellers "switched off early for the holidays," he said, but they surprised him by coming back strongly in 2023.

As household budgets are squeezed, Knight Frank anticipates a 5% decline in housing prices this year.

Prior to prices beginning to rise once more in the fall of 2024, the Office for Budget Responsibility, the government's official forecaster, expects a 9% decline in prices.

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