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The property market saw a continued resurgence in February, with both buyers and sellers re-entering the fray, leading to an anticipated 10% increase in home sales this year, as per the latest data from property website Zoopla.
Zoopla reported that all metrics of activity surpassed those of February 2023, with agreed-upon sales climbing by 15% and buyer demand increasing by 11%.
Consequently, the market is poised to achieve 1.1 million transactions throughout the year, up from 1 million in 2023, Zoopla indicated.
While nationwide prices experienced a marginal 0.5% year-on-year decrease, regional disparities were evident. Prices surged in Scotland, Northern Ireland, Wales, the Midlands, and the North of England, but declined across the South of England.
For instance, Belfast witnessed a notable 4.3% price hike, whereas the East of England saw a 2.1% decline.
The regions witnessing price drops are typically those with the loftiest property values, where buyers have grappled with affordability challenges exacerbated by escalating mortgage rates and rising living costs.
Last summer, fixed-rate mortgage rates soared to their highest levels since 2008 in response to the ascending base rate in money markets.
Following the Bank of England’s pause in rate hikes after reaching 5.25% in August, mortgage deal rates have been receding, bolstering market activity “alongside accelerated growth in household incomes,” according to Zoopla.
Nonetheless, Zoopla highlighted that lenders are now withdrawing the cheapest sub-4% mortgages.
Zoopla advised buyers to prepare for mortgage rates ranging from 4-5% throughout much of 2024, correlating with flat to low single-digit price increments.
Sarah Coles, Head of Personal Finance at Hargreaves Lansdown, acknowledged the upturn in activity as positive for sellers but cautioned that the housing market still confronts “significant hurdles.”
Coles noted, “The drop in mortgage rates towards the end of 2023 and the beginning of 2024 played a pivotal role in boosting market confidence, but rates are beginning to rise again. While they currently hover around last year’s levels, with the average two-year rate remaining below 5.75%, an increase might prompt some buyers to adopt a wait-and-see approach.”
Coles further observed that in the South, excluding London, “we’re witnessing the aftermath of relentless, eye-watering price escalations over recent years. Consequently, affordability has become a major concern, and significant drops in asking prices persist.”