2024 looks set to be a ‘bumper year’ for house sales according to the latest House Price Index from Zoopla. A combination of rising incomes and a two-year low for average mortgage rates has led to the highest level of new sales since late 2020.
The data shows that house prices have risen by 1% over the past 12 months, compared to -0.9% a year ago. The large choice of homes for sales and affordability pressures have held back price inflation.
House prices are rising at an above-average rate in affordable areas like Northern Ireland (5.6%), Scotland (2.4%), North-West (2.3%), Yorkshire & Humberside (2%) and North-East (2%).
At the same time, prices are down in Eastern England (-0.3%) and the Southeast (-0.1%). Overall, house prices in the UK are set to be 2% higher in 2024, as price drops from this time last year disappear from the annual rate of price inflation.
Continued sales growth this year has created the largest sales pipeline for four years. According to Zoopla’s analysis, there are currently 306,000 homes undergoing the buying process, which is 26% (62,250) more than 12 months ago.
These homes are valued at £113bn, a rise of 30% over the past year when a spike in mortgage rates hit buyer demand and reduced the number of sales over 2023 H2.
A combination of existing homeowners and first-time buyers is helping to drive this growth in sales, with many previously delaying their moves due to high borrowing costs. The biggest buyer cohort in 2024 is likely to first-time buyers, accounting for 36% of all sales, followed by homeowners (31%), cash buyers (27%) and landlords buying with a mortgage (7%).
The index also finds that the average mortgage repayment for a typical UK FTB home is 17% cheaper than renting, compared to a much smaller 2% difference a year ago when mortgage rates were higher.
Commenting on the Zoopla data Hargreaves Lansdown head of personal finance Sarah Coles said: “This is the year of the first-time buyer, as the horror of renting is persuading more tenants to take the leap into home ownership. Rents have been driven up and mortgages rates are dropping, so that owning a typical first-time buyer home is now 17% cheaper than renting.
“Escaping the rental trap is no mean feat. Lower mortgage rates mean that once they’ve built a deposit, their monthly outgoings can be much lower. However, the real challenge is building a deposit at the same time as paying sky high rents.”
Propertymark chief executive Nathan Emerson said: “We have seen an encouraging transformation across the year in terms of a resilient trend of house price growth. Affordability and overall confidence in the sector have also seen a boost throughout the year so far.
He added: “Considering the UK Government has an ambitious aim to deliver growth following what has been a turbulent few years, we hope that this week’s Autumn Budget will be used as a springboard to improve housing supply. Propertymark has long argued that Stamp Duty reform is one way to do that, especially for those wishing to downsize.”