Housing demand and agreed sales have increased in the first three weeks of 2024. Agreed house sales have increased by 13% in January across all regions of the UK compared to a year ago, according to Zoopla.
The property website has published its UK House Price Index for January, showing that annual house price inflation has dropped by 0.8%, and year-on-year buyer demand has increased by 12%. Zoopla describes the first three weeks of January as showing ‘a strong seasonal rebound in sales activity’.
Zoopla says that the data shows a ‘positive start’ and adds that homes for sale are over 20% higher than the same period a year ago.
Sales are up the most in Yorkshire and Humber (19%) and the West Midlands (17%). Zoopla also describes ‘a greater flow of homes listed for sale’ and says this indicates that sellers, many of whom are also buyers, feel more confident in the property market. The overall housing supply is 22% higher than last year.
Modest price falls
Zoopla adds that house prices are continuing to adjust to higher mortgage rates by showing modest price falls. The most significant price fall has occurred in the East of England at 2.5% and the South West at 2.2%.
While increased house sales look encouraging, a spokesperson for Zoopla is keen to stress that it’s essential not to be too optimistic. ‘It’s a positive start to the year, but this is a rebound off a low base,’ says Richard Donnell, Executive Director of Research at Zoopla. ‘Sub-5% mortgage rates are encouraging, but buyers remain price sensitive and focused on value for money. There is upside for sales volumes, but prices still need to adjust to allow for reducing buying power.’
According to the trade publication Mortgage Strategy, a fifth of sellers have had to accept more than 10% below the asking price to secure a sale.
Recent mortgage rate reductions are expected to support sales volumes rather than impact house prices. Mortgage rates are likely to remain in the 4% to 5% range in the near term, with those with higher deposits able to access the best rates.