As the festive season wraps up and normal routines resume, many are contemplating a potential move in 2025. According to Rightmove's first House Price Index of the year, the national average house price has risen by 1.7% this month, reaching £366,189.

There has been an 11% increase in sellers coming to market compared to this time last year. This gives buyers starting their search the broadest range of options at the beginning of a year since 2015.

What Happened to House Prices This Month?
This January has seen the largest early-year jump in house prices since 2020, coinciding with the busiest start to the year for Mortgage in Principle applications. This suggests that many buyers are evaluating their financial options and planning their budgets for a new home.

While the increase in properties for sale has encouraged more activity, it has also heightened competition among sellers.

It’s also worth noting that despite this increase, average asking prices are still £8,942 below their peak in May 2024, reflecting the ongoing affordability challenges faced by buyers.

What Do the Experts Think?
The start of the year has been lively, and if the current trend persists, it could set the stage for a bustling spring season, a traditionally busy time for the housing market.

However, uncertainties remain, including potential changes in interest rates and the impact of increased stamp duty for many homebuyers starting on April 1.

Rightmove’s Property expert Colleen Babcock explains:
“It’s important to consider the broader market context. Many buyers are still facing affordability constraints, with high mortgage rates limiting borrowing power. First-time buyers, in particular, are grappling with reduced support schemes, rising rents, and higher stamp duty fees from April, all while trying to save for deposits.

“Our early-year snapshot shows encouraging signs for 2025. However, sustained momentum will depend on early and ongoing Bank Rate cuts to help reduce mortgage rates. Additional support for first-time buyers, especially in high-cost areas, would also be beneficial.”

What Could Happen Next?
Looking ahead, 2025 is expected to remain a buyers’ market, characterised by an increased selection of homes and longer times to secure a buyer.

In the short term, all eyes will be on the effects of the upcoming stamp duty changes and future interest rate decisions by the Bank of England.