House sales keep increasing but price inflation slows
Housing market activity has continued at its fastest rate for four years, although with plenty of choice available, house prices are under pressure, according to Zoopla’s latest house price update.
Prices grew by 1.4 per cent year on year in May, according to Zoopla’s latest house price index.
“There is plenty of demand to buy homes and more sales are being agreed than a year ago. Serious sellers need to be very realistic on pricing, as buyers have lots of homes to choose from,” Richard Donnell, executive director of Zoopla, said.
A fifth of homes have been on the market for more than six months with no sale, the property platform found.
Earlier this month, data from Rightmove revealed the number of houses coming to the market has increased by 11 per cent year on year.
“The momentum in the number of sales being agreed is positive and clearly demonstrates an underlying desire of households to move home… Improved mortgage affordability will support buying power in the second half of the year,” Zoopla said.
Interest rates are expected to continue to fall this year, albeit at a lower rate than analysts had predicted last year.
High wage growth in the UK, along with several shocks to the global economy, has made the Bank of England’s Monetary Policy Committee nervous.
That means affordability, a notorious issue in the UK’s housing market, will remain stretched for longer.
While the government’s house-building program is expected to slow house price in the medium-to-long term, their policies have yet to filter through into the construction market.
Zoopla found that house prices are rising more quickly in markets with below-average property values, the crisis discourages Brits from buying in inner cities.
The platform predicted sales to grow five per cent in 2025, but expects inflation to remain between one and two per cent.