Over the last decade, house price falls have only fallen in three quarters- Q4 2022 and again in Q3 and Q4 2023, both times in response to a spike in mortgage rates. 2024 has seen a return to low rates of price growth with rising demand and more sales agreed.
Average UK house prices have risen by 1.4% in the seven months to July 2024, and are on track to be 2.5% higher over 2024. The annual (12-month) rate of growth is lower at +0.5% as it includes price falls over the latter part of 2023.
The average estate agent listing homes for sale on Zoopla has 33 homes for sale unsold, the highest level since 2017 and a 7 year high - Zoopla notes that many of these sellers are also buyers which is why sales agreed are up 23% year-on-year, and they expect 'greater choice' for buyers to keep house price inflation in check over 2024 and into 2025.
House prices are still adjusting to the impact of higher borrowing costs in some local areas. House prices continue to register small falls on both a quarterly and annual basis in postal areas including Taunton (TA, -2.0%), Dartford (DT, -1.3%), Enfield (EN, -1.1%) and Harrogate (HG, -1%) - year on year price changes.
While measures of market activity are higher and price inflation positive, Zoopla warned sellers to 'remain realistic on pricing' - buyers are stll price sensitive due to higher mortgage rates, and 1 in 5 homes had the asking price reduced by 5% or more in August to attract greater buyer interest.
Homes that need an asking price cut take more than twice as long to sell as homes without a price reduction. Zoopla's data showed it takes around a month (28 days) to agree a sale where there has been no asking price reduction but sales take more than two months (73 days) where the asking price has been cut 5%+ to attract demand, and a higher proportion of homes with 5%+ asking price cuts don’t sell at all.
Commenting on the latest report Richard Donnell, executive director at Zoopla says:
“Momentum in the sales market continues to build as mortgage rates drift lower and more and more sellers gain the confidence to list their home for sale. Buyers have much greater choice which will support sales numbers, but this will keep prices rises in check.
"Buyers have less purchasing power than 2-3 years ago and remain price sensitive meaning sellers can’t afford to get ahead of themselves on where to set the right price for their home. If you need to cut the asking price by 5% or more then your home will take twice as long to sell or may not sell at all”.
