New Rightmove report has a cloud despite some silver linings

Headlines are already shouting excitedly about a jump in property prices and listings. The UK housing market has started 2025 with remarkable activity, with new sellers entering the market at a record rate since Boxing Day, according to a report that has just been released by Rightmove.
January saw a significant 1.7% increase in the average asking price for properties, climbing by £5,992 to reach £366,189. This represents the largest January price rise since 2020 and the most substantial increase for any month since May 2023, signalling renewed confidence in the market.
The surge in new listings, up 11% compared to the same period last year, seems to indicate that sellers are eager to take advantage of a jump in property values and high demand from buyers. The number of buyers contacting agents about properties has risen by 9%, while the number of sales agreed has jumped 11% since December 26.
“Sellers are responding to strong buyer demand and stable prices, seizing an opportune moment to list their homes,” said Matt Smith, a mortgage expert at Rightmove. However, he cautioned that some sellers might be overly optimistic with their pricing, leading to properties remaining unsold.
Although property prices have shown resilience, they remain nearly £9,000 below the peak recorded in May 2024, reflecting the affordability challenges many buyers face. Mortgage rates have also been a key factor, with average two-year fixed mortgage rates climbing to 5.52%, up from 5.39% before the Labour government’s October budget. Five-year fixed rates have hovered around 4.75%, similar to last year.
Buyer activity remains robust, bolstered by falling inflation, which dipped unexpectedly to 2.5% in November, but there must be concerns that this rush of sellers and listings could foreshadow a price slump as sellers rush to beat the looming April 1 stamp duty hike. Tom Bill, head of UK residential research at Knight Frank, also warned that higher borrowing costs could impact demand in the coming months. From April, the tax-free threshold for first-time buyers will drop to £300,000, potentially affecting those purchasing more expensive homes. However, most first-time buyers in less costly regions are expected to remain unaffected.
Rightmove forecasts 1.15 million property transactions this year, with an average asking price increase of 4%. However, market uncertainties, including the pace of interest rate cuts and the effects of stamp duty changes, may temper this optimism.
Colleen Babcock, a property expert at Rightmove, noted: “New sellers have started the year with a bang. However, given the higher-than-expected competition among sellers, we anticipate a moderation in asking price growth over the next few months.”
Whatever does pan out, it looks like the time to make hay is now – we will have to wait and see what April 1 brings us.