Zoopla: Home sales rising but buyers’ market prevails

Property supply and demand have rebounded since the start of the year amid falling mortgage rates but sellers are still making large price reductions to attract buyers, data suggests.

Zoopla’s latest House Price Index shows UK buyer demand is up 12% and sales agreed are up 13% year on year.

It coincides with a fall in mortgage rates in recent weeks, with some deals below 4%.

Supply of homes for sale is 22% higher than a year ago but despite the rebound in activity, Zoopla said a buyers’ market remains and a fifth of sellers are still accepting more than 10% below the asking price to secure a sale.

This is close to one in four across London and the South-East and rising across the rest of the UK. It is evidence that while deals are being agreed, home buyers remain price-sensitive and focused on value for money, Zoopla said.

Its index found that house prices ended the year down 0.8% at £264,400.

Richard Donnell, executive director at Zoopla, said: “It’s a positive start to the year with all key measures of housing activity higher than a year ago. The fall in mortgage rates has led to a rebound in buyer demand and sales following a weaker second half of 2023 when many movers put decisions on hold.

“This improvement in activity will support sales volumes which, at one million, reached an eleven year low in 2023. We don’t see these trends as a precursor to higher prices in 2024 as it remains a buyer's market. Sellers looking to move should be encouraged by these early signals of activity but buyers remain price sensitive and focused on value for money. Over-optimism by sellers could quickly stall the current improvement in market activity.” 

Commenting on the report, Matt Thompson, head of sales at Chestertons, said: “2024 started with a busy property market as buyers have been motivated to either commence or finalise their property search. The increasing availability of more affordable mortgage deals thereby plays a key role and will likely continue to fuel a surge in buyer activity over the coming weeks.”