Positive outlook for 2024
The beginning of 2024 has seen a robust surge in the housing market, fueled by declining mortgage rates and pent-up demand from the latter half of 2023. Zoopla's latest data indicates that this momentum has seamlessly transitioned into the first half of February.
Notably, buyer demand has soared, registering an 11% increase compared to the same period last year. This heightened demand is evident across the entire UK, with London leading the charge, closely followed by the North East and North West regions.
London, which has trailed the rest of the UK in housing market performance for seven years, is now experiencing a positive shift. The market has witnessed increased buyer numbers and improved affordability, although it remains a relatively expensive housing market. The average value of flats in London has risen by just 13% since 2016, in contrast to the UK average house price, which has seen a 33% increase and up to 50% higher in Wales.
Richard Donnell, a spokesperson for Zoopla, emphasized the significance of analyzing the trends in the number of sales agreed to gauge the housing market's overall health. With almost a fifth more homes for sale than a year ago, the supply-demand imbalance is narrowing, providing buyers with more choices and increasing the likelihood of successful sales agreements.
The data also reveals a positive impact on market confidence, drawing more sellers into the arena. Zoopla notes a 10% increase in the flow of new homes for sale compared to a year ago, reaching the highest level since 2020. This surge is particularly noticeable in the East of England, the South West, and the North East.
In 2023, the average time from a property's initial listing to a sale being agreed, subject to contract, was 34 days. This is a two-week extension from the faster-paced market of 2022, where homes went under offer in 20 days. Donnell underlines the importance of setting the asking price at the right level to attract demand, especially for unique or unusual homes.
Regionally, the sales periods varied, with London and the South East experiencing the longest sales periods (up to 40 days) and Scotland and the North East boasting the fastest sales periods (20 and 30 days, respectively). Housing affordability and the influence of higher mortgage rates on buying power contribute to these regional differences.
Zoopla advises caution, noting that once a sale is agreed, it can take an additional three to six months for the legal and mortgage processes to conclude. Despite reports of rising house prices, Zoopla expects the heightened activity to persist in the coming months, indicating a better balance between sellers and buyers than seen in the past three years. Donnell concludes with advice for sellers to stay grounded, acknowledging that finding a buyer may be easier, but a greater choice of homes for sale allows for more negotiation room.
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