New property sales agreed are 25% higher than a year ago as buyers return to the market, led by gains in the East Midland (32%) and North East (30%), according to the latest Zoopla House Price Index.
The rebound in activity supports slow recovery in house price growth – UK house prices increase by 0.7% up from -0.3% a year ago, the figures show.
More and more stock is coming to market, up 12%, from homeowners looking to move and other groups concerned over recent and future possible tax changes, while a third – 32% – of homes for sale on Zoopla are ‘chain free’ – typically a two-bed house.
Coastal and rural areas including Truro (47%) and Torquay (44%) have 40% more homes for sale than average as second home owners look to offload properties.
Property industry reactions:
Nigel Bishop of Recoco Property Search said: “Second homeowners and buy-to-let investors are facing drastic changes as some local authorities have or are going to start charging double council tax for properties that are left empty for more than a year. We are seeing more second homeowners contemplating if maintaining their holiday home remains a sound financial investment. If a substantial number of second homes is being put up for sale, we could see the property market in areas such as Cornwall become increasingly attractive to house hunters who are seeking a permanent residence but are currently priced out of the market. That being said, a lot of properties are being offered at considerably high asking prices and sellers will need to adjust their expectations.”
Nathan Emerson, CEO of Propertymark, said: “It’s positive to see further growth within the housing market. 2024 has been a year of progression that has seen changes within the wider economy help uplift the ability for people to approach the marketplace with a new level of assurance. We are starting to see early signs of lenders having the confidence to shift up the landscape by offering sub-four per cent mortgage deals in some circumstances, which of course sits firmly below the current base rate and points towards future confidence within the economy.”
Tom Bill, head of UK residential research at Knight Frank, commented: “The unfortunate irony for the property market is that mortgage rates and confidence have both been falling in recent weeks. Lower borrowing costs would ordinarily drive transaction levels higher but some buyers are holding back ahead of a Budget the government has warned will be painful. If the Budget is better than feared or largely as expected, we expect to see a relief bounce that lasts into next spring.”
Simon Gerrard, managing director of Martyn Gerrard, said: “The figures from Zoopla today are really positive and paint an encouraging picture for the market. It’s especially pleasing to see a return to house price growth, and whilst people may be slightly discouraged that this only a minimal increase, the numbers today actually represent a healthy housing market. After all, we want incremental and sustainable growth in house prices, rather than the rollercoaster ride of sharp increases and plummeting falls that we’ve experienced in the last couple of years.
Simon Gerrard
“It is also good to see an increase in transactional volume, which again is the sign of a healthy and properly functioning property market. This is what the new government will have wanted to see, as it supports the agenda of sustainable long-term growth. As we see more mortgage products come on to the market, they will be become increasingly competitive and more available, which should see transactional volume continue to climb moving forward.”
Adam Feather, managing director of Robert Anthony Estate Agents, added: “It is fair to say that lower mortgage rates are helping to increase property sales, but given that the outlook for interest rates remains uncertain, it is impossible to know what will happen demand, and in turn house prices in the medium- to long-term. Purchasers will inevitably remain cautious.