The lowest mortgage rates for 15 months have driven a double-digit increase in buyer demand and home sales, according the latest reports from Zoopla.
The data shows that the number of sales agreed is 25% higher for the four weeks to 22 Sept 2024 (compared to the same period in 2023) and sales are up by over 10% across all areas and are up to 30% higher across the East Midlands and North-East.
The number of homes for sale continues to grow as greater confidence amongst sellers sees more homes listed on the market. Zoopla says this includes homeowners looking to move as mortgage rates fall but also investors and second home owners selling in anticipation of possible tax changes.
A third (32%) of homes for sale on the Zoopla site are currently ‘chain free’ as investors and second home owners look to sell homes amidst recent tax changes and speculation around further tax changes in the upcoming Budget this month.
Many English councils are expected to double council tax for second homes in 2025. Coastal and rural postal areas popular with second home owners, such as Truro (47%), Torquay (44%), Exeter (41%), Lincoln (41%) and Bournemouth (40%), have all seen available supply increase by over 40%, as a result of incoming tax changes.
However, annual house price growth is still negative in these areas with rising supply keeping house prices in check.
Affordability continues to be a constraint on house price growth, especially in southern England. London prices have registered the biggest turnaround over the last year moving from annual price falls of -1.7% a year ago to modest price gains of +0.5% today.
Whilst house prices are lower than a year ago in the South West, South East and Eastern regions of England, in the rest of the UK, house price growth is higher than a year ago with prices up to 2.5% higher. Home values in Northern Ireland are 5.5% higher, having under-performed the rest of the market in recent years.
Over a third of sales (37%) are being agreed at more than 5% below the initial asking price, highlighting further how buyers continue to be competitive with offers. This proportion has improved from a year ago but remains at a level that suggests low single digit house price growth ahead.
Commenting on the latest report Zoopla executive director Richard Donnell said: “Lower mortgage rates are delivering a much needed confidence boost to homeowners, many of whom have sat on the sidelines over the last two years. Market activity is up across the board and expectations of lower borrowing costs will continue to bring buyers and sellers into the market.
He added: “Speculation over possible tax changes in the Budget and the impact of previous tax changes are continuing to add to the growth in the number of homes for sale. We remain in a buyers market and greater choice of homes for sale will keep house price inflation in check into 2025.”
Propertymark chief executive Nathan Emerson said he was encouraged by the latest Zoopla data. “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.”
He added: “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.”
