The UK’s housing market is experiencing a sales boom with a 12% increase in agreed sales compared to last year, according to Zoopla’s research.
The property platform says this surge is down to more homes being available for sale and renewed buyer confidence.
While house price growth remains flat (they are down slightly at -0.2%), Zoopla predicts an extra 100,000 sales this year compared to 2023 – but sellers will need to price their properties realistically.
‘Rebound in sales being agreed continues for a fourth month’
Richard Donnell, the firm’s executive director, said: “The rebound in sales being agreed continues for a fourth month as mortgage rates have fallen, consumer confidence improves, and home buyers have much greater choice of homes for sale.
“The pipeline of sales is growing, and we expect 100,000 more people to move home in 2024 than last year.”
He adds: “There is clear evidence that house prices are firming, and the pace of price falls is slowing.
“We don’t believe that prices will start to rise as buyers face much higher mortgage repayments than in the recent past.”
He says that the market is adjusting to higher borrowing costs and that price stability will help boost sales growth.
Affordability remains a concern
Despite the positive sales figures, affordability remains a concern due to significantly higher mortgage repayments compared to pre-pandemic levels.
Mortgage rates are around 4.5%, compared to sub 2% in March 2021, resulting in a 61% increase in annual repayments for the average home buyer using a 70% loan-to-value mortgage.
Southern England is most affected by the rise in mortgage repayments due to higher house prices in the region.
The annual cost of mortgage repayments for an average priced home has increased by over £5,000 per year since 2021 in the South West, South East and the East of England.
Lower income growth and rising living costs
This affordability squeeze, coupled with lower income growth and rising living costs, is keeping house prices in check across southern England.
Zoopla’s analysis reveals that 64% of homes are in markets experiencing annual price falls, primarily concentrated in southern England.
However, there are signs of improvement in pricing across other regions, with a decline in the proportion of homes experiencing price falls.
Scotland and the North East are showing resilience, with no areas in the North East experiencing annual price falls due to its status as the UK’s most affordable region.
Uplift in market activity was slightly delayed
Matt Thompson, head of sales at Chestertons, said: “The uplift in market activity typically associated with spring was slightly delayed this year but became more evident in the course of April.
“Compared to last month, we have seen an increase in the number of London house hunters which has led to sellers feeling more confident that now is the right time to put their property up for sale.”
He adds: “Although buyer and seller numbers are both up, demand continues to outweigh supply which still gives sellers in the capital the upper hand during price negotiations.”
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