The UK housing market is beginning to recover from the downturn experienced last year, bolstered by recent trends and expectations of potential interest rate cuts by the Bank of England. According to Zoopla, a notable increase in agreed sales and housing inventory highlights the market’s gradual rebound.
For the four-week period ending July 21, agreed sales surged by 16% compared to the previous year. This uptick is coupled with a rise in the average number of homes available for sale per agent, reaching 33—the highest level in six years. Such an increase in inventory suggests that sellers are optimistic about securing favourable deals in the current market. Although property prices have seen a modest rise of just 0.1% over the past year, Zoopla forecasts a slow but steady recovery, projecting an average price increase of 2% by the end of 2024. Sales data for the first half of 2024 indicates stronger performance relative to both 2023 and pre-pandemic periods. Prices have shown a gradual increase across all UK regions, reversing the declines witnessed throughout 2023. This positive trend is supported by recent data from the Bank of England, which revealed that mortgage approvals remained near their highest level in 18 months as of June. Despite this, high mortgage rates—hovering near a 15-year peak—continue to suppress demand, particularly in southern England.
Zoopla estimates that house sales for 2024 will reach approximately 1.1 million, although this figure remains 10% below the 20-year average. The anticipated 2% rise in home prices by the year’s end is partly due to an acute housing shortage. The newly elected Labour government has pledged to address this issue by overhauling the planning system and committing to build 1.5 million homes over the next five years. However, Zoopla notes that the impact of these changes on the housing market will be minimal in the next 12 to 18 months, given the time required for implementation.
