Average UK house prices have increased by 1.4% in the seven months to July 2024
Zoopla’s latest House Price index shows a housing market steadily recovering from the impacts of higher mortgage rates with prices rising slowly.
However Zoopla warns that record levels of supply mean caution is needed among sellers when it comes to pricing their home.
Over the past decade, house price have only dropped in three quarters – Q4 2022 and again in Q3 and Q4 2023 – and each time it was in response to a rise 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 increased by 1.4% in the seven months to July 2024. They 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 improvement in house prices over the year to date is being felt across most areas of the country. Annual house price inflation ranges from -0.9% in the East of England to +5.1% in Northern Ireland. Price inflation has turned positive in London (+0.2%), while prices are posting small declines in the South East (-0.7%), South West (-0.6%) and East Midlands (-0.1%).
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 peak. Many of these sellers are also buyers which is why sales agreed are up 23% year-on-year.
The portal says it expects greater choice for buyers to keep house price inflation in check over 2024 and into 2025.
While measures of market activity are higher and price inflation positive, Zoopla insists that it is important sellers remain realistic on pricing.
It says: Buyers remain price sensitive as their purchasing power has been eroded by higher mortgage rates. This is slowly being offset by faster incomes growth but there is further to go to fully repair affordability. This explains why 1 in 5 homes had the asking price lowered 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 cut. We find it takes nearly a month (28 days) to agree a sale where there has been no asking price reduction but sales take over two months (73 days) where the asking price has been reduced 5%+ to attract demand. A higher proportion of homes with 5%+ asking price cuts do not sell at all.