Asking home prices saw the smallest increase in 22 years in February

Woman looking at houses for sale

According to property website Rightmove, the average asking price for a UK home rose by just £14 in February – the lowest increase for the month since records began in 2001.

The average asking price for a home is now £362,452, it said.

Asking prices usually increase at the beginning of the year as sellers prepare for the spring selling season.

However, prices fluctuate and in some months of the last year, such as B. November and December, they went back.

Rightmove said higher mortgage rates and the cost of living would put pressure on what people could afford. Months of falling property prices follow, with predictions of further declines this year and next.

“Many sellers are breaking with tradition and showing unusual initial price reluctance,” said Tim Bannister, Rightmove’s director of property science, of the latest numbers.

He added buyers are taking more time to “find the right property at the right price” and want “greater realism on price”.

House prices in the UK fell for five straight months through January, according to Nationwide building society.

Meanwhile, annual home price growth slowed to 1.1% from 2.8% in December.

One reason for this is partly higher mortgage interest rates, which have depressed purchasing power. Interest rates have fallen from the highs of 6.65% recorded after Liz Truss’ mini-budget in September, but remain well above where they were a year ago.

According to research firm Moneyfacts, the average two- and five-year fixed-rate mortgages are still above 5%.

At the same time, inflation – the rate at which prices are rising – is near a 40-year high, putting pressure on household budgets.

Even so, Rightmove said buyers benefited from “more choice, albeit with revised budgets to accommodate higher mortgage rates.”

The company said the number of agreed sales recovered but was still 11% below 2019 levels. They were down 30% after the mini-budget.

And Tom Bill, head of UK housing research at estate agent Knight Frank, said the housing market had recovered somewhat since Christmas.

“Buyers and sellers shut down early for the holidays due to mini-budget-induced volatility, but came back surprisingly strong in 2023,” he said.

Knight Frank expects home prices to fall about 5% this year as household budgets come under pressure.

The Office for Budget Responsibility, the government’s official forecaster, has forecast a 9% fall in prices through the fall of 2024 before prices start to pick up again.

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