"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."
- Richard Donnell, executive director at Zoopla
Zoopla predicts a positive second half of the year for housing market activity, despite stalling house price growth.
While house prices increased by just 0.1% in the past 12 months, they have increased across all regions of the UK over the first half of 2024.
Zoopla expects UK house prices to increase slowly but steadily over the second half of 2024, on average increasing towards around 2% by the end of the year.
While growth over the last 12 months has been largely static, the regional view shows more of a mixed picture, and somewhat of a north-south divide as affordability continues to be more of a constraint in southern England.
For example, while Belfast has seen a 4.3% increase (and Northern Ireland more widely a 3.9% increase) and Scotland has seen an overall increase of 1.4%, South East England saw a fall of 1%, South West England a drop of 0.7% and in the East of England, prices are down 1.2%.
An improved outlook for the housing market
Zoopla's positive outlook for the property market is instead bolstered by an increased number of homes for sale - higher than at any point in the previous six years.
More sellers naturally means more buyers who appear motivated by a range of reasons. In particular Zoopla is seeing that many would-be movers are upsizers - those looking for a larger home, usually to accommodate a growing family.
The greater supply has resulted in the number of sales agreed being 16% higher than a year ago, with sales up across all regions and countries of the UK. Sales agreed are now 22% above pre-pandemic levels.
In addition, buyers are paying a greater proportion of the asking price than they were last year, when higher mortgage rates impacted demand. Buyers in the UK are currently paying 96.8% of the asking price - the highest figure for 18 months.
The figure is on a par with the longer-term average and points to continued house price growth. In pound terms, this equates to houses selling for an average of £16,600 below their asking price in June 2024.
Richard Donnell, executive director at Zoopla, said: “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.
“While we don’t expect to see any impact from the new Government, or the King’s Speech specifically, in the next 12-18 months, it is possible we will in the longer term. The housing market is essentially an extension of the UK economy. Government policies focused on economic growth that feeds into income growth will help support both home buyers and renters. The Bank of England will have more impact on the market in the short term and much depends on the timing of the first base rate cut.”
