LONDON (Reuters) - Average asking prices for newly listed homes in Britain had their biggest start-of-the-year increase since 2020 but uncertainty about the pace of interest rate cuts is hanging over the market, property website Rightmove (OTC:RTMVY) said on Monday.
The average price of properties coming to market rose by 1.7% between Dec. 8 and Jan. 11 to 366,189 pounds ($445,944), 9,000 pounds below a peak hit in May last year, Rightmove said.
Compared with the same period a year ago, asking prices were 1.8% higher, it said.
Britain's housing market gained some momentum last year on hopes that borrowing costs would continue their fall although slower-than-expected rate cuts sapped some demand.
Rightmove said the number of new properties coming to market since Dec. 26 was up 11% from a year earlier while the number of buyers contacting agents about properties for sale was 9% higher and agreed sales rose by 11%.
Colleen Babcock, head of partner marketing at Rightmove, said despite the positive start to the year many buyers were struggling to afford a new home due to high mortgage rates.
April's expiry of a lower rate of property purchase tax on less expensive homes represented another test for buyers.
"The market needs a boost for that momentum to be sustained, in the form of early and ongoing Bank Rate cuts, which should hopefully help to reduce mortgage rates," Babcock said.
The Bank of England is widely expected to cut its benchmark Bank Rate from 4.75% to 4.5% on Feb. 6 after its next scheduled monetary policy meeting.
($1 = 0.8212 pounds)