The strong bounce in home buyer demand has been boosted by an increase in first-time buyers looking to step onto the housing ladder, according to Zoopla's House Price Index.
Momentum in the housing market shows no sign of slowing, with the number of housing sales agreed 10.1% higher than this time last year.
Home buyer demand - in other words, people looking to buy a home - has been bolstered by the return of first-time buyers. And it continues to outstrip the supply of homes for sale, driving UK house prices up 0.3% in January.
The annual rate of house price growth now stands at 4.3%, the highest level since April 2017. It means that the average home is worth £226,600, according to our House Price Index.
What’s happening to house prices?
At a country and regional level, house prices have climbed the most in Wales, with the country’s annual growth rate standing at 5.6%. North west England is hot on its heels, with house prices in the region rising 5.5% year-on-year.
At a city level, Liverpool and Manchester are once again the hottest local markets, with year-on-year house prices increasing 6.8% and 6.3% respectively.
How busy is the housing market?
So far this year, buyer demand is up 12.4% compared with the same six weeks in 2020.
The stamp duty holiday, which offers an average saving of £4,500, has spurred many people to search for a new home.
Meanwhile, the experience of successive lockdowns and working from home as a result of the pandemic has prompted many people to carry out a once-in-a-lifetime re-assessment of their homes and lifestyles. And this, in turn, has been the catalyst for a lot of home moves too.
The strong bounce in demand has been further boosted by an increase in the number of first-time buyers in the housing market (for more, see below).
But the supply of homes for sale is failing to keep pace. The number of new homes listed for sale is 14.5% below 2020 levels, with the overall number of homes being marketed down 13.8% on last year. There are two reasons for this.
Firstly, despite the housing market being open for business, some sellers are continuing to press pause on allowing home viewings during the current lockdown. Our Research & Insight team expects sellers to progress with marketing their homes for sale once restrictions ease.
Secondly, our data points to a resurgence of first-time buyers, who have no property to sell when they move.
This mismatch between the levels of buyer demand and homes for sale is evident across most of the country, and most acute in the north east of England and Wales.
There is one exception to this trend: London. Buyer appetite to move in the capital city is down 17% compared with last year, when there was a surge in housing market activity. However, it’s important to note that when compared with previous years, it is still well ahead of the average.
To download the full Zoopla report, click here