Property sales activity running at the highest level since the 2020 boom during the pandemic, Zoopla data suggests.
The portal’s latest House Price Index for October shows the pipeline of sales agreed working through to completion is the largest for four years and 30% higher annually. The total value of these homes £130bn, Zoopla stated.
Zoopla suggests that lower mortgage rates and rising incomes are boosting the market.
Buyer demand is up 22% annually, while new supply and total stock are up 13% and 11% respectively, according to the report.
In contrast, house prices are up just 1% annually to £267,500, compared with a 0.9% decline during the same period last year.
Zoopla said house price growth is being held back by a large choice of homes for sale and affordability pressures which are keeping buying power in check.
In more affordable areas, house prices are rising at an above-average rate for example the North-East (2%), Yorkshire & Humberside (2%), North West (2.3%), Scotland (2.4 per cent) and Northern Ireland (5.6%). Conversely, house prices are down slightly in Eastern England by 0.3% and by 0.1% in the South East.
UK house prices remain on track to be 2% higher over 2024 as price falls from this time last year drop out of the annual rate of price inflation, Zoopla said.
The report said first-time buyers are the largest buyer group so far in 2024, representing 36% of sales.
First-time buyer numbers are supported by landlords selling homes, as in these instances the average asking price tends to be lower.
Zoopla states 12% of homes listed for sale were previously rented, with an above average concentration of landlord sales taking place in London. The average asking price of a formerly rented home is £307,000, which is 16% lower than the average UK asking price of £365,000.
However, first-time buyers could be hit next year if the Government goes ahead with reducing the Stamp Duty exemption, Zoopla warns.
Currently, the property website estimates that 80% of first-time buyers pay no Stamp duty, with 14% paying a partial amount.
The impact of a return to previous thresholds would be more keenly felt in southern England where the average first-time buyer in London and the South East would pay £5,600 and £1,390 respectively, compared to nothing today, Zoopla said.
Richard Donnell, executive director at Zoopla, said “It is positive to see the sustained increase in sales activity over 2024 which reflects growing confidence amongst buyers and sellers supported by lower borrowing costs and rising incomes. Overall, the market remains on track for a modest 2% price increase in 2024 and 1.1m sales. First-time buyer numbers have recovered as mortgage rates have fallen but a sizeable deposit is still required to buy. Possible changes to stamp duty relief will only create further barriers to ownership for this group who already face significant affordability constraints.
The housing market doesn’t need short term policy tweaks from the Budget. The health of the housing market and people’s ability to afford housing is linked to the health of the economy. It’s vital the Budget is focused on economic growth and expansion in jobs and rising incomes. The primary focus should be on providing the financial support and investment needed to help build the homes the nation needs for buyers and renters.”
Commenting on the report, Nathan Emerson, chief executive of Propertymark, said “we have seen an encouraging transformation across the year in terms of a resilient trend of house price growth. Affordability and overall confidence in the sector have also seen a boost throughout the year so far. Considering the UK Government has an ambitious aim to deliver growth following what has been a turbulent few years, we hope that this week’s Autumn Budget will be used as a springboard to improve housing supply. Propertymark has long argued that Stamp Duty reform is one way to do that, especially for those wishing to downsize.
When the Bank of England’s Monetary Policy Committee meet on Thursday next week, we hope to see further progression on potentially cutting interest rates as this will continue to improve the overall health of the economy.”
HMRC records annual property sales rise but more stock needed
Property sales are rising annually but are becoming stagnant on a monthly basis due to restricted stock, a senior agent has warned.
It comes as HMRC data shows a 9% annual increase in property transactions at 91,820, up just just under 1% on a monthly basis.
The figure is 94,800 on a non-seasonally adjusted basis, 2% higher than September 2023 and 9% lower than August 2024.
Nick Leeming, chairman of Jackson-Stops, said “the short delay in transaction data shows us the immediate boost that the outcome of the election provided the housing market, with buyers pressing on with their searches amid falling interest rates and positive wage growth. Yet, transaction levels are becoming more stagnant month on month due to the lack of available stock on the market at this time which would enable more purchases.
Despite yesterday’s theatrics in the Budget, the property market remains in largely the same position as before. The Budget missed a clear opportunity to introduce Stamp Duty reform, something that could have also helped to stimulate greater activity within the market. This is a reform that many market commentators were already expecting, and one that the UK public is on board with. Jackson-Stops’ own research revealed that one in four people across the UK were supportive of a change to stamp duty. Though the decision to keep housing policy changes light yesterday shouldn’t spook buyer confidence, we hope this will only be strengthened further by falling inflation and better borrowing conditions.”
Matt Thompson, head of sales at Chestertons, added “in September, sub-4% mortgage products as well as lower interest rates motivated house hunters to start or finalise their property search. This uplift in buyer interest enticed sellers to put their property up for sale sooner rather than later which provided buyers with a larger pool of properties to choose from. We currently have 17% more properties under offer than in 2020 and still register new house hunters entering the market. We expect this level of buyer activity to continue over the coming weeks, especially if the Bank of England announces another rate cut next week.”
Nathan Emerson, chief executive of Propertymark, said the market is looking positive.
He added: “However, there are some aspects contained within the budget which are extremely disappointing, with first time buyers feeling the brunt, as the current Stamp Duty threshold is lowered back to £300,000 from next April being an example. Typically, this would mean an additional tax liability of £6,250 for those hoping to get on the housing ladder on a home priced at £425,000.”