
The housing market is seeing a renewed increase in sales, with the number of sales agreed in May reaching the highest in four years, Zoopla reveals.
The property website says the increase is due to a rise in the number of homes for sale, with 13% more homes on the market than this time last year, alongside improvements in the cost and availability of mortgages.
Changes to how mortgage affordability is calculated mean borrowers can afford to borrow 20% more than earlier this year, which is also supporting the growth in sales.
While increased market activity is enabling households to meet their moving ambitions, the latest house price index found that average UK house prices are just 1.6% higher than this time last year at £268,250.
The average home sale is currently being agreed at 3% or £16,000 below the average asking price, a level which Zoopla says has been stable over recent months.
The strongest price gains are being registered in cities such as Blackburn (5.8%) across the North West as employment growth boosts demand and house prices.
Meanwhile, the increased number of homes for sale in southern England is boosting buyer choice and keeping price growth in check at 1%.
Zoopla executive director Richard Donnell says: “More homes for sale means more buyers looking to move home. This, coupled with more attractive mortgage deals and changes to how lenders assess affordability, is supporting an increase in the number of sales being agreed.”
“There are more sales and stronger house price increases in northern regions of England and Scotland, where homes are more affordable. In southern regions of England, affordability continues to weigh on price inflation and the number of sales being agreed.”
“Sellers and buyers need to adopt different tactics based on where they live across the UK; however, all sellers need to keep their feet on the ground and be realistic on pricing expectations.”
“We expect sales to keep rising over the second half of the year, with UK home values on track to be 2% higher by the end of the year.”
Propertymark National Association of Estate Agents president Toby Leek says it’s “encouraging” to see the housing market at its busiest since May 2021 and “stable” house price inflation.
Leek states: “This news demonstrates that there is still an appetite for housing as inflation in general continues to impact the wider economy.”
“However, with the North West becoming the UK’s most popular housing market, it shows that more work needs to be done to even out house prices throughout the country so that people living in certain regions do not get priced out of the local housing markets there.”
Knight Frank head of UK residential research Tom Bill comments: “Buyers can see there is a healthy supply of property on the market this spring, which means they have become choosier.”
“Stamp duty has also become more expensive since April, especially for second homes, which has increased the mood of hesitation. Together with a sense that economic pressures may increase this year, it means asking prices will need to be particularly realistic to attract interest.”
Chestertons head of sales Matt Thompson adds: “Some house hunters paused their search amid the Easter holidays but were quick to resume their activity in May. Buyer motivation was further boosted by the Bank of England’s decision to cut interest rates to 4.25% which even led to more first-time buyers entering the market.”
“Sellers remained motivated throughout the month, resulting in a larger number of properties available for sale. As the majority of vendors have been eager to move themselves, there has been a stark uplift in agreed sales in May and as buyer demand remains strong, we also expect a busier than usual summer market.”
Last month, Zoopla revealed that homes in England and Wales spend an average of 36 days on the market before a sale is agreed.