Price rises again after New Year, says conveyancing service

A housing market forecast based on conveyancing instructions says average prices will dip this month.

Average prices will fall by 1.1 per cent in December as a result of deals agreed between buyers and sellers in the early autumn, when the impact of the stamp duty holiday subsided and demand fell back to be more normal levels leading sellers to price more competitively. 

But once again - most likely as a result of a severe shortage of new stock coming to market - the prices agreed between buyers and sellers began to rise in October and November which will be reflected in an increase of 2.5 per cent in January, slowing to a rise of 0.2 per cent in February 2022 when the average completed sale price will be £342,900.

The forecast comes from house moving website Reallymoving.

Its chief executive Rob Houghton comments: “House price growth in the New Year is inevitable based on transactions already underway, following a strong market performance in the autumn when a lack of stock and continued high levels of buyer demand helped support prices. 

“As we head towards Christmas there are a number of headwinds with the potential to impact buyer sentiment, not least the spread of Omicron which brings renewed uncertainty and concern over jobs, inflation and economic growth. 

“Although interest rates remain very low, the first rise feels significant and shows that despite the escalating Covid-19 situation, the Bank of England won’t wait to tackle rising inflation. 

“Rising borrowing costs will impact the affordability of First Time Buyers coming to market and those in a position to buy soon may be more tempted to press ahead and secure a fixed rate deal as quickly as possible.”

Reallymoving captures the purchase price buyers have agreed to pay when they search for conveyancing quotes through the comparison site, typically 12 weeks before they complete, enabling it to provide a three-month residential property price forecast.