The average asking price of a home rose by around £4,500 in January, new data shows.
Across Britain, the average price of a property coming on the market increased by 1.3 per cent or £4,571 month-on-month, to £359,748, property website Rightmove said.
It said the volume of new properties coming onto the market for sale is 15 per cent higher than a year ago.
However, average asking prices are still 0.7 per cent lower than a year earlier.
Competitive pricing from sellers is still vital, with the number of new properties coming to market outpacing an increase that is also being seen in buyer demand, the website said.
Sam Mitchell, CEO of Purplebricks, said: “The boost to demand and affordability is bringing buyers out in their droves, while those already on the property ladder are taking advantage of better remortgage rates and first-time buyers are finding it easier to access the market.
“More people returned to the office at the beginning of this year after a sustained period of working from home, which means we’ve seen a rural/urban rebalance in property purchasing.”
The amount of potential buyers contacting estate agents about homes for sale in the first week of 2024 was also 5 per cent higher than in the same period last year, with the growth in activity strongest in London and the North East of England.
Meanwhile, the number of sales being agreed as January gets under way has been higher than the start of last year.
Tim Bannister Rightmove’s director of property science, said: “After a stop-start market in 2023, the initial signs suggest a smoother year for movers in 2024.
“More new sellers are now entering the market, and with more confident pricing. While the increased level of buyer activity that we’re also seeing may justify some of this increased pricing confidence from sellers, it’s important that sellers who are keen to find a buyer don’t get carried away with new year enthusiasm when setting their price expectations.”
He added that higher mortgage rates and the cost of living crisis is still limiting buyers’ spending power.
Mortgage rates have dropped in recent times with several lenders offering five-year fixed rates under 4 per cent.
However, it is still much higher than the rates of 1 per cent in 2021 and brokers believe rates will start increasing again in the next couple of weeks.
The report was released as estate and lettings agent Hamptons said the average private rent on a newly-let property in Britain increased by 10.2 per cent annually in December, marking the strongest end-of-year annual growth since its records started in 2014.
The average monthly rent on a newly-let property in December 2023 was put at £1,340.