House sales set to slide by 23 per cent this year
UK house sales are on track to be 23 per cent lower this year compared to 2022, according to the latest reading from Zoopla, as a tumultuous period for the market continues to eat away at the health of the property sector.
The number of homes sold this year is expected to sit at 1m, with this figure set to remain flat in 2024, but Zoopla said this could be higher if mortgage rates fall back towards four per cent.
Analysts at the property portal also predict that UK house prices will fall two per cent over 2024 with hopes that rising incomes will “steadily repair housing affordability”.
Consistent rate rises from the Bank of England which have led to higher borrowing rates have been blamed for a slowdown in the housing market over the last year.
Weaker demand and reduced buying power has also resulted in a rapid cooling of house price growth from 9.2 per cent a year ago to -1.1 per cent today, Zoopla said.
Despite the fall, house prices still remain around £40,000 higher than they were pre-pandemic when the market was bolstered by cash-rich remote workers keen to get on the ladder.
Richard Donnell, executive director at Zoopla, said: “Modest house price falls over 2023 mean it’s going to take longer for housing affordability to reset to a level where more people start to move home again.
“Income growth is finally increasing faster than inflation but mortgage rates remain stuck around five per cent or higher. We believe that house prices will post further small falls, averaging two per cent, over 2024 with 1m home moves.”
He added: “Slow house price growth and rising incomes over the next 12-18 months will improve affordability to levels last seen a decade ago, creating the potential for a rebound in home moves as consumer confidence returns.”