According to the latest data from Zoopla, the UK housing market has seen a robust increase in new sales agreements towards the end of 2023. According to the latest data from property giant Zoopla, new sales are up 17% compared to the same period last year, signaling an improving market sentiment.
Zoopla’s recent House Price Index shows a 19% surge in demand compared to last year, coinciding with an increase in the availability of homes for sale. This has led to better alignment in buyer and seller pricing expectations. Notably, annual UK house price inflation has moderated to -1.1%, a significant drop from the 7.2% recorded in November 2022.
Cash buyers have played a pivotal role in this shift, representing a third of all sales in 2023, while sales relying on mortgages have decreased by a third. Despite predictions of steep price falls, the market has remained relatively stable. Zoopla attributes this resilience to several factors, including a strong labour market and stringent mortgage affordability checks introduced in 2015, which have prevented excessive borrowing during periods of low mortgage rates.
In 2024, buyers are expected to expand their search for better value, particularly in southern England’s high-value markets, where upsizing is costliest. Zoopla data indicates that many buyers in these regions plan to move more than 10 miles to find their next home.
Looking ahead to 2024, Zoopla anticipates the momentum in new sales to continue, with a projected 1 million sales completions. House prices are expected to decline by a further 2%, realigning with rising incomes. First-time buyers, despite affordability challenges, are predicted to form the largest group of prospective buyers, driven by the rapid increase in rent, which has outpaced mortgage repayments over the past three years.
Richard Donnell, Executive Director at Zoopla, comments on the market’s resilience: “The housing market has been more resilient than many expected over 2023… Mortgage regulations introduced in 2015 have stopped an over-valuation of housing which is why the decline in house prices has been modest over the year… UK housing still looks expensive by historic standards which is why we expect UK house prices to fall a further 2% over 2024 as prices and incomes re-align.”