Survey: Surging Property Sales and Demand in the UK
Property sales and demand in the UK have experienced a notable increase compared to the same period last year, according to a recent survey, signaling an improvement in sentiment. Zoopla, a property website, reported that newly agreed-upon sales were 17% higher in December than the previous year, a time when higher mortgage rates impacted market activity. Demand has risen by 19%, measured by potential buyers contacting agents to inquire about and arrange viewings for specific properties listed on Zoopla. The growing number of homes for sale is expanding options and supporting overall sales.
Zoopla recorded an annual 1.1% decrease in house prices nationwide this month, with London experiencing a steeper drop of 1.5%, averaging at £536,800. In the capital, prices increased by 0.3% in the City, while Croydon, Bromley, and Woking saw the most significant price declines at 3.5%, 3.4%, and 2.8%, respectively.
Cash buyers represented one-third of all sales, while property sales involving mortgages declined by a third due to higher mortgage rates. The Bank of England raised its base rate incrementally to 5.25% by August to address persistent inflation, maintaining it since then. Last month, inflation slowed more than anticipated to 3.9%, raising expectations of upcoming rate cuts. Mortgage rates have already decreased, with a two-year fix averaging 5.95% and a five-year fix at 5.55%, according to Moneyfacts.
Zoopla attributes December's housing sales boost to an increased housing inventory.
Richard Donnell, Executive Director at Zoopla, remarked that the housing market has proven more resilient than expected in 2023. He attributed this to mortgage regulations implemented in 2015, preventing an overvaluation of housing. While house price falls have been concentrated in the south and Midlands, prices in Scotland and Northern Ireland have slightly increased over the year. Donnell anticipates a further 2% decline in UK house prices in 2024 as prices and incomes realign.
Zoopla predicts a million property sales in the coming year, with first-time buyers constituting the largest group, accounting for two-fifths of the total. Likewise, experts in the market recognize the housing market's volatility in the past year, attributed to elevated inflation and subsequent higher interest rates. They express optimism that as inflation subsides, there is potential for lower interest rates, rejuvenating the UK housing market.
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