The latest House Price Index from Zoopla reveals a promising outlook for the UK housing market, with house prices expected to increase by 2% in 2024. The market is experiencing a resurgence in activity, supported by a 16% increase in sales agreed compared to the previous year and buyers paying an average of 96.8% of the asking price.
Increased Supply and Buyer Activity
Zoopla’s analysis shows that the number of homes for sale is at its highest point in six years, providing buyers with more options and contributing to the rise in sales. This increase in supply is partly driven by upsizers—buyers seeking larger homes to accommodate growing families. The broader selection has also led to buyers paying closer to the asking price, with homes selling for an average of £16,600 below the asking price in June 2024.
Nathan Emerson, CEO of Propertymark, commented on the figures, stating: “Today’s figures show that the general election did not damage people’s confidence in borrowing money to purchase their next home in the way many may have anticipated. Momentum has sustained itself, however, now we have a newly elected government that is ambitious about building new homes, we hope that confidence increases further in the housing market. In addition, Propertymark is keen to see further confidence boosts with the Bank of England considering a cut in interest rates when they feel this is the right time to do so.”
Regional Disparities in House Prices
The data reveals a mixed regional picture, with house prices generally increasing in the North of England while falling in the South. For example, Belfast saw a 4.3% increase, and Scotland experienced a 1.4% rise. In contrast, South East England saw a 1% decrease, the South West dropped by 0.7%, and the East of England fell by 1.2%.
Richard Donnell, Executive Director at Zoopla, noted, “The housing market is starting to hot up after a stone-cold 2023. There are clear signs of growing confidence amongst buyers and sellers with many more homes for sale and buyers paying an increased proportion of the asking price. We expect to see more sales but house price inflation will be kept in check by more supply and affordability pressures keeping a lid on buying power, especially across southern England.”
Impact of Government and Economic Factors
The current government and the policies outlined in the King’s Speech are not expected to have a significant impact on the housing market in the next 12-18 months. However, a potential rate cut by the Bank of England could boost market activity and consumer confidence.
Simon Gerrard, Managing Director of Martyn Gerrard estate agents, shared his perspective: “It is little surprise that house price growth has levelled off in the year to June, but after an extended period of severe turbulence under the previous government, this is arguably no bad thing for the market. I think today’s house price growth figures probably reflect the transitional period that we’re in post-election, and that this is a brief stall, rather than a grinding halt, for the property market.”
Nathan Emerson added, “It is fantastic to see further positivity and confidence returning to the housing market, and now that the general election is out of the way and we have a promise of 1.5m new homes across the next parliamentary term, we should start to see even more confidence and affordability across the sector.”
The overall sentiment in the housing market is optimistic, with increased supply, steady buyer demand, and the potential for supportive economic policies paving the way for a positive outlook in 2024. As the market continues to adapt, stakeholders are hopeful for sustained growth and stability.
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