In a recent survey conducted by Zoopla, it has been revealed that UK property sales and demand have experienced a significant upturn compared to the previous year. This surge in activity is seen as a positive sign for the housing market, indicating improved sentiment and a greater number of homes available for sale. Let’s delve deeper into the survey findings and explore the implications for the future.
December were 17% higher than the same period last year
According to the survey, new sales agreed in December were 17% higher than the same period last year. This growth is particularly noteworthy considering the dampening effect of higher mortgage rates on market activity during the previous year. In addition, demand for properties has soared by 19%, with prospective buyers actively contacting agents to inquire about and arrange viewings for specific properties listed on Zoopla. This surge in demand can be attributed to the increased availability of homes for sale, providing buyers with more options and boosting sales.
Zoopla’s data also uncovered interesting regional variations in house prices across the UK. While the annual house price fall nationwide was 1.1%, it’s important to note that London experienced a slightly steeper drop of 1.5%. However, even within London, there were areas that showed resilience. For example, the City witnessed a modest increase of 0.3% in prices, showcasing its ability to withstand market fluctuations. Nevertheless, these declines can be seen as relatively minor in the broader context, highlighting the overall stability of the housing market.
Factors Influencing The Property Market
The survey highlighted the impact of mortgage rates on property sales. Cash buyers accounted for a significant portion of transactions, representing one-third of all sales, while mortgage-based sales declined by a third due to higher mortgage rates. The Bank of England’s successive rate hikes, which brought the base rate to 5.25% by August, aimed to address inflation concerns. However, since then, the rate has remained unchanged. The recent drop in inflation to 3.9% has raised hopes of potential rate cuts in the coming year, further stimulating the market.
Future Outlook in 2024
Zoopla predicts that property sales will reach a million in the upcoming year, with first-time buyers constituting the largest group of prospective buyers, accounting for 40% of the total. This projection suggests a positive outlook for the housing market, indicating a potential rebound in sales volumes compared to the previous year. If inflation continues to decrease, it is expected that interest rates will follow suit, further revitalizing the housing market.
Property Expert Insights
Richard Donnell, the executive director at Zoopla, expressed confidence in the resilience of the housing market throughout 2023, underscoring the impact of mortgage regulations implemented in 2015. He noted that these regulations prevented an overvaluation of housing, resulting in a modest decline in house prices. Donnell also highlighted regional disparities, with house prices in Scotland and Northern Ireland slightly higher compared to the south and Midlands. Nevertheless, he emphasized that UK housing remains expensive by historical standards, which led Zoopla to predict a further 2% decline in house prices in 2024.
The surge in UK property sales and demand reported by Zoopla’s survey offers a glimmer of hope for the housing market. Improved sentiment, increased availability of homes for sale, and potential rate cuts in the future indicate a positive trajectory for the housing market in the coming year. However, experts remain cautious, emphasizing the need for vigilance and the monitoring of economic indicators. Nonetheless, the survey findings suggest that the UK housing market is poised for a rebound and may present favorable opportunities for both buyers and sellers in the near future.