Buyer demand for homes is a fifth higher than this time last year and new sales agreed are almost a quarter higher, building on the increased momentum in sales from earlier in the year as mortgage rates fall to an average of c4.5% for a 5-year fixed rate at 75% LTV, according to Zoopla’s House Price Index.
All key measures of sales market activity are higher than 2023 supported by economic growth and rising consumer confidence. Sellers continue to bring homes to market at an above-average
rate. Many of these sellers are also buyers, which explains why sales agreed continue to increase, according to the report. Nathan Emerson, CEO of Propertymark, commented:
“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.”
The long-awaited cut in the base rate in August was welcome news for the wider economy and consumer sentiment, but it has had no material impact on levels of buyer demand compared to the underlying trend over recent weeks. The real reason buyer demand for homes is 20% higher than last year is down to a fall in demand over summer 2023 in response to the spike in mortgage rates.
However, their data did register a modest increase in new sales agreed in the days following the base rate reduction as wary buyers waited for a rate cut to agree a sale. The good news is that there is a sufficient buyer demand to support rising sales volumes. Sales agreed up 23% is a truer reflection of the health of the sales market which remains on track for 10% more sales than 2023.
Commenting on the latest report 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 2-3 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”.
