UK housing market has witnessed a surge in property sales despite a modest downturn in house prices, according to the latest findings by Zoopla. The property portal has observed a 0.5% decrease in house prices over the past year, with regional disparities showing some areas experiencing price increases while others see declines. This nuanced landscape has led to a notable increase in buyer demand, up 11%, and a 15% rise in sales agreed compared to the previous year, indicating a rejuvenated market activity.
Estate agents are reportedly finalising six sales a day, marking an improvement from the average of 5.2% sales a day recorded last year. Additionally, the supply of homes has seen a significant 21% increase, suggesting a growing confidence among sellers. Zoopla now forecasts an optimistic outlook for the housing market, expecting 1.1 million sales in 2024, a slight increase from the 1 million sales anticipated in 2023.
The report highlights a ‘three-speed’ housing market in the UK, differentiated by regional economic conditions. Southern England, excluding London, has witnessed the largest annual price falls due to rising mortgage rates and affordability challenges, with an average home price standing at £344,000. Conversely, London’s market, while the most expensive, has shown resilience with slower house price inflation over the past seven years, leading to improved affordability and a more robust demand. The rest of the UK has seen limited annual price falls, with higher mortgage rates having a less pronounced impact on purchasing power.
Richard Donnell, Executive Director at Zoopla, commented on the resilience of the housing market amidst challenging economic conditions, attributing the momentum in new sales to falling mortgage rates which are now beginning to stabilize. “The housing market has proved very resilient to higher mortgage rates and cost of living pressures. More sales and more sellers show growing confidence amongst households and evidence that 4-5% mortgage rates are not a barrier to improving market conditions,” Donnell stated.
Sarah Coles, head of personal finance at Hargreaves Lansdown, provided further insights into the market dynamics, noting that while buyer and seller activity has picked up, the market faces hurdles such as the potential rise in mortgage rates and the balance of supply and demand. She highlighted the regional disparities, especially in southern England, where affordability remains a significant issue due to historic price increases. Coles advised buyers to remain cautious and negotiate hard, given the varied market conditions across the country.
Nathan Emerson, CEO at Propertymark, echoed the positive sentiment, emphasizing the momentum within the housing market and the encouragement it offers to potential sellers. He expressed optimism for the future, suggesting that if inflation falls as expected, there might be room for the Bank of England to consider cutting interest rates, which could further alleviate financial pressures.
This comprehensive analysis by Zoopla and commentary from industry experts underscores the complex yet resilient nature of the UK housing market, with varying regional trends and the potential for continued growth in sales despite the challenges posed by economic conditions and mortgage rate fluctuations.
