Sales agreed increase, house price falls are moderate
The UK housing sales market is off to a strong start this year, driven by a resurgence in pent-up demand and a drop in mortgage rates below 5%.
The latest Zoopla House Price Index showed that sales agreed, a key metric reflecting market confidence and activity, have surged across all regions and countries of the UK during the initial three weeks of 2024.
According to the report, new sales agreed have seen a notable uptick across the UK, with an average increase of 13% compared to the same period last year. Leading this improvement are Yorkshire and The Humber, with a 19% rise, followed closely by the West Midlands with a 17% increase.
This trend, Zoopla noted, suggests a growing alignment between buyers and sellers on pricing, with sellers continuing to adjust asking prices to attract buyer interest, a pattern observed since last year.
Moreover, the overall supply of homes for sale has expanded, signalling increased confidence among sellers. Compared to last year, the overall supply of homes on the market has risen by 22%, with the average estate agent now listing 28 homes for sale. This uptick in supply offers buyers more options and is expected to help stabilise house prices.
The report also showed a moderation in annual UK house price falls, with a current rate of -0.8% as of December 2023, an improvement from the -1.4% low recorded in October 2023. While house price declines are most pronounced in the East of England, positive annual price growth persists in Scotland, Northern Ireland, and the three northern English regions.
Meanwhile, London has seen a substantial rebound in new buyer demand in 2024, with a 21% increase. This surge in demand is observed across inner and outer London, as well as core commuter areas, potentially indicating a reversal of fortunes for the London sales market after seven years of subdued activity compared to the rest of the UK.
Despite the positive developments, the report cautions against over-optimism for the remainder of 2024, emphasising that the market still favours buyers. Zoopla’s data reveals that a significant number of sellers continue to reduce asking prices to attract interest, with over one in five sellers conceding more than 10% off the asking price to secure a sale.
“It’s a positive start to the year with all key measures of housing activity higher than a year ago,” commented Richard Donnell, executive director at Zoopla. “The fall in mortgage rates has led to a rebound in buyer demand and sales following a weaker second half of 2023 when many movers put decisions on hold.
“This improvement in activity will support sales volumes which, at one million, reached an 11-year low in 2023. We don’t see these trends as a precursor to higher prices in 2024 as it remains a buyer’s market.
“Sellers looking to move should be encouraged by these early signals of activity, but buyers remain price sensitive and focused on value for money. Over-optimism by sellers could quickly stall the current improvement in market activity.”
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