The number of homes for sale in the UK has reached its highest level in eight years. Zoopla predicts that this surge in supply will help moderate house price increases in the coming year.
This growth follows a period of uncertainty due to rising mortgage rates. However, the increased supply is expected to bring stability to the housing market.
Increased Housing Supply
According to Zoopla, the UK housing market has seen a surge in the number of homes for sale, reaching its highest level in eight years. This increase is expected to help stabilise house prices in the coming year.
Currently, there is a 20% increase in homes on the market compared to the same period last year. The average estate agency branch now lists 31 properties, up from just 16 in 2022.
Market Dynamics
Richard Donnell, Zoopla’s Executive Director of Research, stated that the record high supply of homes for sale indicates renewed confidence among sellers, many of whom are also buyers. Greater choice in the market is expected to keep prices in check throughout 2024.
In the past few years, estate agents faced a persistent shortage of homes. The COVID-19 pandemic led to intense demand for spacious living, resulting in rapid sales. However, a slowdown followed due to rising mortgage rates and market instability from the mini-budget of September 2022.
Regional Differences
Nationally, house prices are reported to be 0.1% lower than this time last year. However, there are significant regional variations.
For instance, Belfast has seen a 3.6% increase in house prices over the past year, while Ipswich has experienced a 3% decline. This disparity highlights the north-south divide in the UK housing market, with higher-priced properties in the south requiring larger mortgages.
Regions like the southwest of England, which saw significant population increases during the pandemic, now have 33% more homes for sale than a year ago. Changes in tax regulations for holiday lets and second homes also contribute to this increase in supply.
Impact on Buyers and Sellers
The influx of homes on the market offers more options for buyers, providing a sense of relief and stability in the housing market.
This increased supply is a welcome prospect for both buyers and sellers. Sellers, many of whom are also buyers, can benefit from the greater choice available.
Zoopla predicts that house prices will remain stable, ending the year at similar levels to where they began. This outlook contrasts with other forecasts predicting price increases.
Sales and Demand
Zoopla’s data indicates a 13% year-on-year rise in the number of agreed sales in May, a key measure of demand.
This rise in demand, coupled with the 20% increase in supply, suggests a more balanced market moving forward.
The increase in homes for sale is expected to moderate house price growth, ensuring stable prices into 2024.
Challenges Ahead
Despite the positive outlook, challenges remain in the housing market. Rising mortgage rates continue to be a concern for many potential buyers.
Market instability, such as that caused by sudden policy changes, can also impact buyer and seller confidence.
Future Outlook
Overall, the increased housing supply is a positive development for the UK market, offering more options and potentially more stable prices.
The significant increase in the number of homes for sale in the UK is a promising sign for the housing market. It offers more options for buyers and is expected to help stabilise house prices throughout 2024.
While challenges such as rising mortgage rates remain, the overall outlook is positive. Zoopla’s forecast of stable house prices is good news for both buyers and sellers.