The UK housing market is “hotting up”, according to Zoopla, with its latest House Price Index showing house prices are on track for a 2% increase in 2024.

The index data suggests the housing market is continuing to adjust to 4%+ mortgages, with positive signs of increased activity. While house prices increased by just 0.1% in the past 12 months (to £265,600 on average), house prices have increased across all regions of the UK over the first half of 2024. 

The index also shows the number of sales agreed is 16% higher than a year ago, and the average agent has more homes for sale than at any point in the last six years.

Buyers are typically paying 96.8% of the asking price – the highest for 18 months – and an average of £16,600 below the asking price. Sales agreed are now 22% above pre-pandemic levels.

Zoopla is seeing that many would-be movers are upsizers, and its data shows that more buyers are having to look further afield to get the home and features they are seeking. This is primarily down to affordability and value for money considerations.  

While growth over the last 12 months has been largely static, the regional view shows more of a mixed picture, and somewhat of a north-south divide as affordability continues to be more of a constraint in southern England. 

For example, while Belfast has seen a 4.3% increase (and Northern Ireland more widely a 3.9% increase) and Scotland has seen an overall increase of 1.4%, South East England saw a fall of -1%, South West England a drop of -0.7% and in the East of England, prices are down -1.2% annually. 

Nothing in the King’s Speech or the new government plans has had any material impact on the outlook for the market in the next 12 to 18 months, according to Zoopla. In the longer term, economic growth, rising household incomes and increased home building will benefit homebuyers and renters, it added. 

In addition, the timing of the first base rate cut will be important in delivering a boost to consumer confidence and market activity rather than leading to any major reduction in mortgage rates for new home buyers, said Zoopla.

Commenting on the latest data, Richard Donnell, executive director at Zoopla, 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 to 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.”