Buyers and sellers continue to return to the housing market with listings and sales on the rise as new data from Zoopla reveals house price declines slowed to 0.5% annually in January.
This compares slightly better than the 0.8% fall back in December 2023 and the 1.4% drop in October 2023.
It comes as market conditions begin to improve with predictions that the base rate could fall as early as spring, pushing mortgage rates down.
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As a result, buyer demand in February was 11% annually, according to Zoopla. Nigel Bishop from buying agency Recoco Property Search says the uplift is “driven by the availability of more affordable mortgage products.”
Equally, sellers have become more motivated to put their property up for sale which he said is resulting in buyers having a larger pool of properties to choose from.
The property website says 21% more homes are for sale than a year ago and the level of sales agreed is up 15%.
“More sales and more sellers shows growing confidence amongst households and evidence that 4-5% mortgage rates are not a barrier to improving market conditions,” says Richard Donnell, executive director at Zoopla.
But, Sarah Coles, head of personal finance at Hargreaves Lansdown warns sellers to stay vigilant as “prices are dropping, asking prices are being cut, and the market faces some serious hurdles.”
Where are house prices falling?
According to Zoopla, the average UK house price stands at £263,600.
The data shows five regions in the UK saw property prices fall, whilst seven regions saw a rise.
| Region | Average house price | % UK average |
|---|---|---|
| North East | £140,300 | -47% |
| Scotland | £162,600 | -38% |
| Northern Ireland | £166,900 | -37% |
| Yorkshire & The Humber | £185,400 | -30% |
| North West | £193,900 | -26% |
| Wales | £203,100 | -23% |
| East Midlands | £227,400 | -14% |
| West Midlands | £228,600 | -13% |
| South West | £312,000 | 18% |
| Eastern | £336,500 | 28% |
| South East | £384,500 | 46% |
Whilst property prices in the North are 47% less than the UK average house price, Coles says “unfortunately for many, it’s still grim down south.”
Will house prices continue to fall in 2024?
Even though house prices fell at a slower rate, the momentum of prices falling has remained, which is good news for buyers, as long as they don’t also have a property to sell.
Consequently, Zoopla predicts 100,000 more home sales in 2024 compared to 2023 at 1.1 million.
The average two-year mortgage rate stands at around 5.75%. However, mortgage rates are slowly picking up which could push further rises and deter buyers away from the market.
Coles says: “Looking further ahead, the strength of the economy will be key. Even when we’re out of the recession, a combination of meagre business investment and low consumer confidence is likely to bring headwinds for economy and the property market.”
But she says “This doesn’t mean buyers need to pack up and head home. If you can afford the property you want for the long term, and secure a manageable mortgage, you can ride out the short-term ups and downs of the market.”
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