House prices will be 1.5% higher by the end of the year says Zoopla.
It suggests that homebuyers are largely shrugging off the election with new sales agreed 8% higher, demand up 6% and 19% more homes for sale than a year ago.
The portal says there are signs that market activity is beginning to seasonally slow. Sales agreed are down slightly month on month across all regions, led by the North East (-6%) and West Midlands (-5%) as the overall stock of homes for sale continues to grow across all areas, albeit at a slower rate than recent months.
In contrast to reduced sales throughout 2023, Zoopla data shows that the market remains on track for 1.1m sales in 2024.
Some 75% of these sales expected in 2024 are either completed or agreed and working toward a completion - with a quarter of a million sales yet to be agreed.
The 1.1m sale figure is 10% higher than 2023 but still below the 20-year average, however rising sales are positive and show more realism on the part of sellers and renewed, cautious confidence amongst buyers.
Looking ahead, the near-term outlook for the sales market will depend on the outlook for mortgage rates which are a function of the outlook for interest rates.
Based on City forecasts for base rates, mortgage rates are expected to remain in the 4.0% to 4.5% range which is sufficient to support sales volumes and low, single digit levels of house price growth.
House prices in the south of England are expected to continue to under-perform the UK average as they re-align with incomes as income growth is the key to supporting sales and demand into 2025. Price falls are currently greatest in the Eastern region (-1.4%) and South East (-1%), with Canterbury in Kent topping the list with the biggest price fall (-4.1%). Prices are rising by up to 3.3% in Northern Ireland and 1.5% in the North West region, with Sunderland experiencing +5.2% price increase..
Commenting on the latest report, Richard Donnell, Executive Director at Zoopla says: “The housing market continues to adjust to higher borrowing costs through modest house price falls and rising incomes. Buyers using mortgages are also relying on longer mortgage terms to gain that extra few percentage points of buying power to afford a home.
The general election campaign has had a limited impact on market activity although the seasonal summer slowdown is arriving. Sales agreed continued to increase and more homes for sale means more buyers looking to move in the second half of the year. The timing of the first cut in the base rate is a key moment and will give a boost to both market sentiment and sales activity. Overall we expect house prices to be 1.5% higher over 2024”
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