Zoopla: estate agency stock hits new high but pricing remains key

Agency stock has hit a seven-year high but realistic pricing is essential, Zoopla warns.

The portal’s latest House Price Index for August found the average estate agent listing homes for sale on Zoopla has 33 homes for sale unsold.

This is the highest level since 2017 and a seven-year high. Many of these sellers are also buyers which is why sales agreed are up 23% year-on-year. 

All measures of activity are up annually, Zoopla said, with buyer demand for homes a fifth higher, while new supply is up 12% and total stock up 14%.

Zoopla says the increase is mainly driven by low levels of activity last year rather than the August interest rate cut, although there has been a “modest increase” in sales agreed so far this month.

Buyers remain price-sensitive though, Zoopla said, with one in five homes experiencing an asking price cut by 5% or more during August,  above average level.

Zoopla said it takes 28 days to sell a home with no asking price reduction, but 73 days if you overprice and then need to reduce by 5% or more.

Rising numbers of new sales agreed, plus buyers paying a greater proportion of the asking price, are supporting a modest recovery in house price inflation, Zoopla claims.

Its index shows that average UK house price has risen by 1.4% in the seven months to July 2024 and is on track to be 2.5% higher over 2024.

The research suggests the increased supply will keep house price inflation in check over 2024 and 2025.

House price inflation has improved across all areas, remaining slightly negative in southern England but with London positive at 0.2%, Zoopla said,

The average UK house price ins £266,400, Zoopla says, while house prices are on track to be 2.5% higher over 2024 with 1.1m sales.

Richard Donnell, executive director at Zoopla, said: “Momentum in the sales market continues to build as mortgage rates drift lower and more and more sellers gain the confidence to list their home for sale. Buyers have much greater choice which will support sales numbers, but this will keep prices rises in check. 

“Buyers have less purchasing power than two to three years ago and remain price sensitive meaning sellers can’t afford to get ahead of themselves on where to set the right price for their home. If you need to cut the asking price by 5% or more then your home will take twice as long to sell or may not sell at all.”

Commenting on the report, Nathan Emerson, chief executive of Propertymark, said: “There is a real positivity within the housing market now that the economy seems to have stabilised.

"This is the UK Government’s chance to take advantage of current market confidence by clarifying a more precise timeframe for enacting the Planning and Infrastructure Bill as this will build the homes desperately needed in order to keep up with ever-growing demand and start to form a plan of action if the Government wants to meet its target of building nearly two million new homes across the next parliamentary term."

Tom Bill, head of UK residential research at Knight Frank, added: “The simple equation for the property market this autumn is that buyer demand will increase as mortgages rates continue to fall.

"As underlying inflation comes under control, more sub-4% mortgages appear and a further rate cut is expected before Christmas, we think UK house prices will increase by 3% this year.

"Financial pain will continue to enter the system as buyers and sellers roll off favourable rates and there is uncertainty surrounding October’s Budget, which means the scope for price exuberance is low.”