A significant drop in mortgage rates has fuelled a surge in buyer demand and home sales, with new figures from Zoopla revealing a double-digit boost to market activity across the UK. The property website’s latest House Price Index highlights a 25% increase in sales agreed compared to the same time last year, driven by the lowest mortgage rates seen in 15 months.
Buyers return as sales surge
The report shows that both sales and buyer demand have jumped by more than a quarter over the past four weeks, as households that postponed moving decisions during the economic uncertainty of recent years are now returning to the market. The number of new sales agreed is up 25% year-on-year, with the East Midlands (32%) and North East (30%) seeing the biggest rises.
According to Richard Donnell, Executive Director at Zoopla, “Lower mortgage rates are delivering a much-needed confidence boost to homeowners, many of whom have sat on the sidelines over the last two years. Market activity is up across the board, and expectations of lower borrowing costs will continue to bring buyers and sellers into the market.”
Increase in chain-free properties
The number of homes for sale has risen by 12%, with more stock coming to market from homeowners looking to move, as well as investors and second-home owners responding to recent and expected tax changes. A third (32%) of homes listed on Zoopla are ‘chain-free,’ with two-bedroom houses making up the majority of these properties.
Coastal and rural areas have seen a particularly strong rise in the number of homes for sale, with places like Truro (47%), Torquay (44%), and Exeter (41%) seeing a surge in listings. This trend is largely driven by second-home owners looking to offload properties ahead of potential tax hikes in the upcoming Autumn Budget.
House prices begin to stabilise
While house prices across the UK have increased by 0.7% in September, affordability remains a constraint on further growth, particularly in southern England. London has seen the largest turnaround, with prices moving from a 1.7% decline last year to modest growth of 0.5% today.
Nathan Emerson, CEO of Propertymark, commented: “It’s positive to see further growth within the housing market. 2024 has been a year of progression that has seen changes within the wider economy help uplift the ability for people to approach the marketplace with a new level of assurance.”
Despite more properties being listed, affordability pressures and increased stock are expected to keep house price inflation in check. Over a third of sales (37%) are being agreed at more than 5% below the initial asking price, indicating that buyers are still price-sensitive.
A promising outlook for autumn
Looking ahead, the property market is expected to remain buoyant, with falling mortgage rates continuing to attract buyers. The recent cuts to interest rates have boosted confidence, and with speculation of further tax changes in the Autumn Budget, more homeowners may look to sell in the coming months.
Sara Palmer, Distribution Director at The Mortgage Lender (TML), noted: “Last month’s interest rate cut has continued to provide a boost in activity this month as homebuyers seek to secure a mortgage amidst lenders continuing to cut rates. This paints a promising picture for the autumn for homebuyers and sellers alike.”