According to Rightmove's (RMV.L) house price index, the average price of a home going up for sale increased by £5,992 to £366,189 in January.

This is the biggest price increase since 2020. With price increases and a record number of early-bird new sellers entering the market since Boxing Day, consumers have more options at the beginning of the year than they have had since 2015.

According to Rightmove, buyer activity has also increased. Since Boxing Day, buyers have contacted agents about houses for sale 9% more frequently than they did the previous year, and sales agreements have increased by 11%.

High buyer choice has contributed to increases in buyer enquiries and sales agreed compared to a year ago, but also means fierce seller competition to attract these new year buyers.

Some sellers may find that they have been too optimistic on their initial pricing and get left on the shelf in favour of more competitively priced neighbours, Rightmove said.

"It’s encouraging to see so many sellers with the confidence to come to market, providing buyers with fresh choice. However, 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," said Colleen Babcock, property expert at Rightmove.

"This could be with a tempting asking price, standout home features, immaculate presentation of the home, or a combination of all of these. It’s vital that in a competitive market, sellers take on the recommendations of their agent, particularly when it comes to setting a realistic price.”

Mortgage rates are also affecting the market, and mean many buyers are not seeing significant affordability improvements.

Rightmove’s weekly mortgage tracker shows that the average five-year fixed mortgage rate is now 4.75% compared with 4.78% at this time last year.

While the average two-year fixed mortgage rate has improved, it is still 4.97%, down only slightly on last year’s 5.08%.

There have been changing messages on how many interest rate cuts to expect from the Bank of England this year, which are causing some uncertainty and will prevent some potential buyers from joining in the new year enthusiasm.

While asking prices are rising and the number of sellers rises, the cost of a house still some way off all-time highs — £9,000 below May 2024’s record, reflecting buyer affordability constraints.