The first weeks of January got off to a strong start with activity spurred on by falling mortgage rates and pent-up demand from the second half of 2023, and the latest data from Zoopla shows this momentum has been carried into the first half of February.
At a headline level, buyer demand is running 11% higher than this time last year. Buyer numbers are up across all parts of the UK but London is firmly out in front, followed by the North East and North West regions.
London’s housing market has lagged behind the rest of the UK for seven years since 2016 with low levels of house price growth due to stretched housing affordability.
The average value of a flat is just 13% higher than in 2016, compared to the UK average house price being 33% higher and up to 50% higher in Wales.
Better value for money is improving the prospects for London but it remains an expensive housing market.
Richard Donnell commented: “One of the best ways to assess the overall health of the housing market is to look at the trends in the number of sales being agreed. If buyers and sellers are agreeing more sales then that shows a healthier market with people able to fulfil their home moving ambitions.
“The fact we have almost a fifth more homes for sale than a year ago is helping to narrowing the supply-demand imbalance, providing buyers with more choice and boosting the chances of sales being agreed.”
Zoopla’s latest data shows sales agreed are up across all regions and countries of the UK and more than 10% higher in six regions led by London, the South East and Yorkshire and Humber.
Improving market confidence is bringing more sellers into the market. Zoopla says it has seen an increase in the number of new homes being listed for sale.
Donnell said: “The flow of new homes for sale is 10% higher than a year ago and the highest it has been since 2020. New sellers are listing their homes at the fastest pace in the East of England, the South West and North East.”
The data also reveals that in 2023 the average sale took 34 days – from the property first being launched to the market to a sale being agreed, subject to contract. This is two weeks longer than the hotter pandemic fuelled market of 2022 – when homes went under offer in 20 days.
“Pitching the asking price at the right level is key to attracting demand and getting a sale agreed. This can be harder for unique or unusual homes. Sellers need to speak to local agents to understand the market and the demand for their type of home,” Donnell continued.
The longest sales periods in 2023 were up to 40 days in London and the South East with the fastest sales periods in Scotland (20 days) and the North East (30 days). This difference primarily reflects housing affordability and the impact of higher mortgage rates on buying power in markets with high house prices. It’s falling mortgage rates boosting activity more in southern England, especially London.
Zoopla says it is important to note that once a sales has been agreed it can take another three to six months for the legal and mortgage process to get to an exchange of contracts and then legal completion when you can get the keys to your new home.
Zoopla expects rising activity to continue over the coming months. The market is better balanced between sellers and buyers than it has been for three years.
“Despite reports that house prices are rising once again it’s important sellers keep their feet on the ground. The positive news is that finding a buyer is going to be easier for most sellers but more choice of homes for sale will mean greater room for negotiation,” Donnell concluded.
