The average price tag on a home has risen at its highest level since 2020 (Image: Getty)
The average price of a home rose to £5,992 in January, with the average asking price of a property at £366,189.
This was the highest recorded monthly growth since January 2020, although this is still £8,942 below the record set in May 2024.
Rightmove, an online estate agent, said the number of properties coming onto the market, buyers contacting estate agents, and sales agreed was higher than the same month last year.
, rates, and the impact of from April made 2025 an uncertain year for .
Rightmove said those wanting to buy smaller homes, such as first-time buyers, will be affected.
From April 1, the “nil rate” stamp duty threshold for first-time buyers will reduce from £425,000 to £300,000 if they are buying a home in England or Northern Ireland.
First-time buyers in less expensive parts of England are not expected to be affected, although the threshold may drag the housing market in more expensive areas.
Rightmove has forecast an average asking price increase of 4% across 2025.
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Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “There is one thing that is more highly priced than any other when it comes to buying a home – and that’s stability. Stability generates confidence to take on longer-term debt and move home.
“Demand remains strong but worries persist, not so much about the likelihood of a reduction in but the pace of their decline, as well as Budget implications for the jobs market later this year. As a result, some buyers are pressing the pause button, especially as there is so much more choice of property evidenced in these figures.
“Nevertheless, the underlying desire to move has not disappeared – transactions are just taking a little longer although many first-time buyers are still trying to beat the March deadline for stamp duty increases.”
Tomer Aboody, director of specialist lender MT Finance, said it was already seeing good levels of activity, which is encouraging. The flip side of more choice for buyers will ultimately mean either lower property pricing as the market shifts to the buyers’ side or sellers withdrawing due to lack of interest and not wanting to taint their property by having it languish on the market for an extended period of time.
Colleen Babcock, a property expert at Rightmove, said: “With lots of homes for buyers to consider, sellers will need to work even harder to stand out from the crowd and attract a buyer.
“This could be with a tempting asking price, standout home features, immaculate presentation of the home, or a combination of all of these.
Last week reported that rules could be loosened by the City regulator.
The move to “simplify responsible lending” for property purchases is part of a range of proposals put forward by the Financial Conduct Authority in an attempt to prove that the watchdog is not standing in the way of the Labour cabinet’s “growth mission”.
The FCA also aims to change the law to try to prevent a repeat of expensive mass compensation schemes for consumers, such as the payment protection insurance (PPI) scandal.
Mark Hollands, head of sales and distribution at Bluestone Mortgages said: “For too long, lending rules have been too restrictive, making getting onto and up the property ladder out of reach for many, if they can afford the monthly repayments.
“Our own research found that nearly two-fifths (37%) of first-time buyers said affordability is their main barrier to homeownership, while a third (34%) are struggling to raise a large enough deposit. As such, we hope to see measures from the government not only focus on easing affordability to open up the market to thousands more participants, but also increasing support for those with small deposits.
“Looking ahead, we would like to see greater collaboration between the government and the industry to support the root causes of the housing crisis. This includes easing the affordability pressures that prospective buyers face as well as providing innovative solutions that help buyer.”