There’s been a strong seasonal bounce of mortgage activity – driven by pent-up demand and rates dropping below 5%, Zoopla research has found.
UK buyer demand is up 12% and sales agreed are up 13% year on year – sales agreed are higher than a year ago across all regions and counties.
London has led the rebound in new buyer demand (+21%), after seven years of lacklustre activity compared to the rest of the UK.
Richard Donnell, executive director at Zoopla, said: “It’s a positive start to the year with all key measures of housing activity higher than a year ago. The fall in mortgage rates has led to a rebound in buyer demand and sales following a weaker second half of 2023 when many movers put decisions on hold.
“This improvement in activity will support sales volumes which, at one million, reached an eleven year low in 2023. We don’t see these trends as a precursor to higher prices in 2024 as it remains a buyer’s market.
“Sellers looking to move should be encouraged by these early signals of activity but buyers remain price sensitive and focused on value for money. Over-optimism by sellers could quickly stall the current improvement in market activity.”
The overall supply of homes on the market is 22% higher than last year, while the average estate agent has 28 homes for sale, boosting choice for buyers.
Indeed, while there’s been a strong start to the year, Zoopla still dubbed this year as a buyer’s market.
Over one in five sellers are still having to accept more than 10% off the asking price to secure a sale. This is close to one in four across London and the South-East and rising across the rest of the UK. It is evidence that while deals are being agreed, home buyers remain price-sensitive and focused on value for money.
Sellers must continue to price realistically if they are serious about moving in 2024. Improved market conditions will boost the chances of a sale, but sellers shouldn’t expect to secure interest if they list at a higher asking price and should be willing to negotiate.
