Published On: Thu, Feb 29th, 2024

Mortgage rates plunge sparks house sale surge that is 15% higher than last year | Personal Finance | Finance

Zoopla has reported a 15 percent increase in house sales compared to the same period last year, as mortgage rates begin to drop. The property website found that agreed sales have risen due to an 11 percent increase in buyer demand and a 21 percent rise in homes for sale compared to last year.

According to their survey, which covers the four weeks leading up to February 18, house prices have only fallen by 0.5 percent compared to the previous year.

This is a significant decrease from October when prices dropped by an average of 1.4 percent across the UK.

Zoopla’s executive director, Richard Donnell, said: “The housing market has proved very resilient to higher mortgage rates and cost of living pressures,” He added: “More sales and more sellers shows growing confidence amongst households and evidence that 4-5 percent mortgage rates are not a barrier to improving market conditions.”

He also noted that the momentum in new sales has been building for the last five months and the sales market is on track for 1. 1 million sales over 2024, supported by new sellers entering the market.

However, he cautioned: “While sales are set to increase we don’t expect house price growth to accelerate further in 2024.”

Zoopla expects to sell approximately 10 percent more homes this year than in 2023. Despite the anticipated cut in the Bank of England‘s base interest rate later this year, Zoopla advises borrowers to still expect four percent to five percent rates for much of the year.

House prices in southern England outside of London have seen the largest annual price falls in the country, with the average home now costing £344,000 – still 30 percent above the UK average.

In London, average prices stand at £534,000. However, affordability in the capital has improved gradually over the past seven years.

Across the rest of the UK, house price growth has slowed considerably over the past year. However, in areas where house prices are at or below average, prices have generally not fallen.

In these areas, “the impact on buying power from higher mortgage rates has been less pronounced”, according to Zoopla.

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