The market is gaining momentum…
The number of UK properties up for sale has hit its highest level in seven years and buyer demand is rising as a recovering economy boosts consumer confidence, according to property listing platform Zoopla.
UK house prices have increased by 1.4% in the first seven months of 2024 - indicating a gradual recovery in the housing market following last year’s downturn caused by higher mortgage rates. However, record levels of property supply suggest sellers should exercise caution when setting asking prices.
Over the past decade, house prices have fallen in only three quarters: Q4 2022 and Q3 and Q4 2023, both periods marked by sharp increases in mortgage rates. The market in 2024 has seen a return to modest price growth, supported by rising demand and an increase in agreed sales.
The latest Zoopla House Price Index projects that UK house prices will end the year 2.5% higher than in 2023. However, the annual rate of growth stands at just 0.5%, reflecting the price declines in late 2023.
Price gains have been uneven across the country, with Northern Ireland experiencing the highest annual inflation at 5.1%, while the East of England has seen a decrease of 0.9%. London has shown slight positive growth at 0.2%, while the South East, South West, and East Midlands have all recorded small declines.
The average estate agent listing on Zoopla now includes 33 unsold properties, the highest level since 2017. Many of these sellers are also buyers, contributing to a 23% year-on-year increase in agreed sales. Despite the uptick in market activity, Zoopla expects the greater supply of homes to temper price inflation into 2025.
Meanwhile, some local markets are still adjusting to the impact of higher borrowing costs, with house prices continuing to decline in areas such as Taunton (-2%), Dartford (-1.3%), Enfield (-1.1%), and Harrogate (-1%) on an annual basis. Prices are rising faster than the national average in more affordable markets near larger cities, including Wolverhampton (3%), Oldham (2.8%), and Wakefield (2.7%).
In Scotland, prices are increasing notably in the Scottish Borders, from Dumfries and Galloway (4.4%) to Galashiels (3.1%), and in Falkirk (3.1%) near Glasgow.
Zoopla’s data underscores the importance of realistic pricing for sellers. Homes requiring a price reduction take more than twice as long to sell as those priced correctly from the start. Properties without a price cut typically sell within 28 days, while those with a 5% or greater reduction take an average of 73 days to sell, with a higher likelihood of not selling at all.
With more sellers expected to enter the market as the autumn season approaches, Zoopla advises that setting the right asking price is critical for securing a timely sale.
“Momentum in the sales market continues to build as mortgage rates drift lower and more and more sellers gain the confidence to list their home for sale,” said Richard Donnell (pictured), executive director at Zoopla. “Buyers have much greater choice which will support sales numbers, but this will keep prices rises in check.
“Buyers have less purchasing power than two to three years ago and remain price sensitive, meaning sellers can’t afford to get ahead of themselves on where to set the right price for their home. If you need to cut the asking price by 5% or more, then your home will take twice as long to sell or may not sell at all.”
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
