Zoopla estimates that UK house prices are ‘overvalued’ by 8%, but are set to return to fair value by the end of 2024 – with house prices also likely to edge up by 1.5% by this time.
New data released by the property portal also reveals that buyers and sellers alike continue to be largely un-deterred by the election campaign; residential property sales agreed (8%) and demand (6%) are both higher than this time last year.
Some 75% of the 1.1 million sales projected for this year are either complete or in the sales pipeline, according to Zoopla.
House prices are 8% overvalued, says Zoopla – Property Industry Eye
Property industry reactions:
Tom Bill, head of UK residential research at Knight Frank, said: “House prices have been kept in check this spring as buyers hesitate due to the election and the uncertain timing of the first rate cut since March 2020. A new government will add a dimension of political stability when the autumn market starts in September and even if the bank rate is not lower by then, a cut will be imminent. Given that mortgage rates will steadily reduce as services inflation comes under control, we expect UK house prices to rise by 3% this year.”
Foxtons CEO, Guy Gittins, commented: “While house price inflation in May is flat, as you could rightly expect before an election, it should be noted that we’ve seen consistently positive demand and sales agreed activity across 2024. With forecast house price rises now roughly in line with current inflation rates, it’s still very clear that property ownership is high on the agenda for hundreds of thousands of people across the UK.
“Certainly in London, the market is considerably more active today than last year and crucially, aspiring property owners and sellers are undeterred by the looming election. Historically, when we see this as a trend, it continues to deliver a strong market post-election. With people’s confidence high after the summer, and an expected interest rate cut, the market could be very busy through to the end of the year.”
Matt Thompson, head of sales at Chestertons, commented: “We are now in the last days of the typically busy spring market and are seeing a bounce in buyer activity. As the date for the general election was announced, house hunters who have been on the fence due to political uncertainty have become more confident about going ahead with their purchase. As a result, we expect June to conclude with a heightened level of buyer interest.”
Myles Moloney, area sales manager at Chase Buchanan, said: “June’s property market to date has remained positive and house hunters with larger equity and buying power have pushed on to agree a sale as they feel the result of the election is forgone. Buyers who are only just starting their property search, however, have been slightly more cautious to observe how the manifestos could benefit them during their property buying journey – particularly first-time buyers.”
Nathan Emerson, CEO of Propertymark, added: “It’s been a positive year so far for the housing market, and it’s extremely upbeat to see confidence returning, despite some of the challenges people have faced such as high inflation and interest rates. With the general election now less than a week away, we are keen to see any incoming government lay down their full plans to further support current homeowners on aspects such as energy efficiency, but also to fully get behind key groups like first-time buyers as they set out on their property journey.”
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