UK house prices will increase “slowly but steadily” by 2 per cent over the second half of 2024, boosted by increased numbers of homes for sale and greater choice for buyers, according to property portal Zoopla.
It found property prices have increased by 0.1 per cent over the past year to reach £265,600 on average but expects this to pick up.
Zoopla said the average estate agent currently has 33 homes for sale – more than at any point in the past six years.
And it said home buyers are getting smaller discounts on properties as the housing market begins to “hot up.”
Purchasers were paying 96.8 per cent of the sellers asking price – the highest proportion for 18 months – with the average discount on asking prices being £16,600.
The average selling price as a proportion of the asking price achieved in June last year was 96.5 per cent before dropping to 95.4 per cent in November, as households struggled with higher mortgage rates, according to Zoopla’s housing index.
It found further evidence of a growing North-South divide with prices, generally speaking, increasing over the past year in the North of England but falling in the South as affordability continues to pose a barrier along with an inadequate supply of new properties.
It said new Government policies will have “no material impact” on the housing market in the next 12-18 months but said it believed a rate cut by the Bank of England would boost confidence and activity.
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Richard Donnell, Zoopla’s Executive Director, 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.”
Simon Gerrard, of Martyn Gerrard estate agents, said he thought the market was currently in a “brief stall, rather than a grinding halt.”
“There are several indicators promising a return to house price growth soon. Inflation has held steady at the Bank of England’s target of 2 per cent, so there is a strong chance the base interest rate will come down in August or September, which will fire the gun on property searches that have been on hold.
“From a wider perspective, it has also been of great relief to see the government prioritise building new homes. Supply is possibly the greatest challenge that the new government faces, and we will have to wait and see whether it can fulfil its promise to resolve this.”
He said he was hopeful the change in government “ushers in a new era of sustainable, steady house price growth that is underpinned by a healthy flow of new homes being built.”
Nathan Emerson, of Propertymark, the property professionals body, said: “It is fantastic to see further positivity and confidence returning to the housing market, and now that the general election is out of the way and we have a promise of 1.5m new homes across the next parliamentary term, we should start to see even more confidence and affordability across the sector.
“It is vital that the new UK Government takes supply issues seriously, as this will help stabilise house prices in the long-term. Propertymark is keen to see a ‘connected communities’ approach applied with the supply of new homes and one that delivers the right homes in the right areas at the right time, while paying extreme attention to ensuring available land is utilised ahead of any move on greenbelt areas.”
It comes as asset manager Abrdn forecast a global property sector recovery as it argued the UK is leading the way.
The Edinburgh-based group, which manages and administers £508bn of funds, said it believes that residential, retail and industrial properties would all surge and outperform the wider market as “the real estate correction is now over”.
It said the UK is leading the way on this global recovery, buoyed by the result of the General Election which means the UK could now arguably be seen “as a bastion of relative calm in a more complex global political environment.”
