The property market is bouncing back, what can we expect over the rest of 2024?

Richard Donnell

The sales market is bouncing back with new sales agreed running 8% ahead of last year. We believe that the market is on track for a 10% uplift in sales volumes versus 2023 which should feed straight through into higher agency revenues from sales commission. Agents that have the right software and partnerships have the potential to generate additional income from these sales through mortgages and conveyancing referrals.

Estate agents and Goldilocks

It’s still tough going in some places but overall the sales market feels more balanced than it has been for some time. Like Goldilocks and the three bears, agents don’t want the market too hot or too cold. The industry wants a decent pipeline of sellers and sales being agreed.

We are currently in the middle ground where buyers and sellers are more aligned on pricing and willing to commit to deals with pre-pandemic levels of sales inventory.  However, higher mortgage rates and cost of living pressures are impacting the ability of households on lower incomes, and with smaller deposits, to access the housing market.

Greater realism on price from sellers

After a big slowdown in house price inflation last year, prices are stabilising at levels where more deals are being agreed. Sellers are becoming more realistic on price but the natural instinct is to push the price to offset the need for a larger mortgage and to help fund stamp duty and other costs.

Our latest Zoopla House Price Index showed that the proportion of the asking price being achieved had increased to 96% – more in line with the pre-pandemic average. There has been an improvement across all areas across the UK. Average discounts to asking price are greater in southern England where house prices are above the national average and the impact of higher borrowing costs has been greater on demand and house price inflation.

House prices aren’t going to take off in 2024

All the UK house price indices are starting to align around the +/-1% range for annual price inflation. The lender, mortgage based indices, recorded much bigger price falls than other price indices that included cash buyers like Zoopla and ONS indices.

The lender indices have bounced back more in recent months rising up above 2% annual price inflation. This led some to suggest that house prices might rise more quickly again. This isn’t going to happen and the latest index data shows house price growth back towards 0-1%.

We don’t expect house price inflation to take off as there is much more supply – the average agent on Zoopla has 30 homes for sale – the highest level since before the pandemic – boosting choice for buyers. At the same time, higher mortgage rates have also dented buying power.

House price falls focused on southern England – London a brighter spot

The current level of price growth varies across the country. Our Zoopla House Price Index shows that prices are still falling slowly across southern England from Norfolk right down to Cornwall. At the same time, prices are rising slowly across the rest of the UK. Prices are falling the most in coastal areas where values were pushed higher over the pandemic and the ‘search for space’. Higher borrowing costs and a return to office based working means prices are posting above average falls in these areas.

Affordability pressures are less on households in areas with lower house prices which is why house prices in Scotland and parts of northern England haven’t posted any house price falls at all over the last year.

Don’t expect big falls in mortgage rates

Falling mortgage rates over recent months have boosted market confidence and supported more sales. There is ongoing speculation over interest rate cuts later this year and how much this may boost demand for homes and prices.

The reality is that city expectations for future interest rate cuts are already baked into fixed rate mortgage deals.  Interest rates would have to fall further and faster for mortgage rates to fall below where they are quickly. 4-5% mortgage rates are manageable for the housing market although the closer they are to 4% the better for volumes and pricing.



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