UK housing market gets early sales boost

The UK’s housing market has shown positive signs in the first quarter of 2024 with sales activity up 9% compared to the same period last year, according to Zoopla’s latest House Price Index.

New listings have also increased by 20%.

Zoopla says this growth is down to rising buyer confidence and helped by falling mortgage rates which are now at a two-year low of 4.4%.

The strongest sales growth has been seen in regions with more affordable housing, such as Yorkshire and The Humber (+11%) and the North West (+13%).

These areas also saw a significant rise in new sellers listing their properties, with the South West experiencing a 28% increase and the North East a 26% rise.

‘Falling mortgage rates have boosted consumer confidence’

The platform’s executive director, Richard Donnell, said: “Rising wages and falling mortgage rates have boosted consumer confidence and this is feeding into improving levels of housing market activity over the first quarter of 2024.

“House prices are falling at a slower rate, but it remains a buyers’ market where there is much greater choice of homes for sale.

“We don’t believe that house prices are about to increase more quickly but there is more buyer interest.”

He added: “Sellers need to remain realistic on where they set the asking price if they are to take advantage of improving market conditions to secure a sale and move home in 2024.”

Gap between asking prices and agreed purchase price

Further evidence of a stabilising market is the narrowing gap between asking prices and agreed purchase prices.

The average discount has shrunk from 4.5% to 3.9%, reflecting a more balanced market compared to pre-pandemic levels.

Greater availability of homes for sale is expected to keep house price rises in check.

More choice and room for negotiation

The average estate agent now has close to 30 properties on their books, providing buyers with more choice and room for negotiation.

Zoopla points to rising household incomes as being the main driver of improved affordability this year, with disposable incomes expected to grow by 3.5%.

Mortgage rates are also likely to see further modest declines if interest rates are cut in the second half of the year.

‘Market witnessed steady demand from buyers’

Matt Thompson, the head of sales at Chestertons, said: “In March, the property market witnessed steady demand from buyers although some house hunters decided to pause their search in the hope for major incentives to be announced in the Spring Budget.

“As this wasn’t the case, the majority of these buyers have since resumed their property search.

“As a result, March concluded the first quarter of the year with a busy property market – particularly in the capital where demand continues to outstrip supply.”