Housing market activity has improved across key measures in the first quarter of 2024, including sales activity, house price growth and the supply of homes for sale, according to Zoopla’s monthly House Price Index.
New sales agreed were 9% higher than a year ago, with 7% more home sales agreed over Q1 2024 versus Q1 2023.
This trend encouraged more sellers to list their homes for sale, with 20% more homes for sale compared to this time last year.
The strongest growth in sales activity was in areas with more affordable house prices such as Yorkshire and The Humber (+11%) where the average house price was £185,600 and the North West (+13%) with an average house price of £194,500.
The strongest growth in new sellers listing homes was in the South West (+28%) and North East (+26%).
Further evidence of improving market conditions was found in the narrowing in the discount between the asking price and the agreed purchase price – which is now in line with the pre-pandemic average.
The average discount from asking price to agreed purchase price has dropped from 4.5% last November to 3.9% in March 2024, the lowest level since July 2023.
This equated to a £10,000 discount compared to a £14,250 discount in November.
Richard Donnell, executive director at Zoopla, said: “Rising wages and falling mortgage rates have boosted consumer confidence and this is feeding into improving levels of housing market activity over the first quarter of 2024.
“House prices are falling at a slower rate but it remains a buyers market where there is much greater choice of homes for sale.
“We don’t believe that house prices are about to increase more quickly but there is more buyer interest.
“Sellers need to remain realistic on where they set the asking price if they are to take advantage of improving market conditions to secure a sale and move home in 2024.”
Refkecting on the data, Tom Bill, head of UK residential research at Knight Frank, said: “Demand in the UK housing market has improved but hasn’t come off the leash yet. Mortgage rates are down compared to last October but higher than in January due to stubborn inflation and Bank of England caution around rates. As supply grows, downwards pressure on prices will increase and a wave of people rolling off sub-2% two-year mortgages from early 2022 will add to the financial pressures in the system. Despite the headwinds, which include wider political instability, there will be a recognisable spring bounce this year.”
Nathan Emerson, CEO at Propertymark, commented: “It is great to see house sales starting to rise again. As the housing market starts to enter a busy time in spring and summer, Propertymark would like to see the Bank of England gradually ease people’s borrowing costs and encourage more people to make their next home move by cutting interest rates. This would be a brilliant way to further stimulate demand in the housing market, especially as our member agents report a 120 per cent increase in the number of potential buyers registered showing a growing appetite.”
Matt Thompson, head of sales at Chestertons, added: “In March, the property market witnessed steady demand from buyers although some house hunters decided to pause their search in the hope for major incentives to be announced in the Spring Budget. As this wasn’t the case, the majority of these buyers have since resumed their property search. As a result, March concluded the first quarter of the year with a busy property market – particularly in the capital where demand continues to outstrip supply.”
