Greater availability of homes for sale should keep price rises in check in 2024, Zoopla has predicted.
The average estate agent had almost 30 homes for sale in Q1 2024, a return to the pre-pandemic average.
Zoopla said this means buyers have more choice and room to negotiate, especially where homes are failing to attract buyer interest in a timely manner.
Rising household disposable incomes are expected to be the primary driver of improved housing affordability in 2024, as disposable incomes are projected to increase by 3.5% over 2024, while house prices look set to remain broadly flat over the year.
Richard Donnell, executive director at Zoopla, said: “We don’t believe that house prices are about to increase more quickly but there is more buyer interest.
“Sellers need to remain realistic on where they set the asking price if they are to take advantage of improving market conditions to secure a sale and move home in 2024”
The timing and scale of interest rate reductions over H2 are the other key factors that could boost market sentiment and reduce mortgage rates.
Expectations of lower interest rates are already priced into fixed-rate mortgages today.
Lower interest rates would likely result in further modest declines in mortgage rates but how far depends on how low money markets see base rates falling.
Mortgage rates around the 4% range would support sales volumes – but would require incomes to continue to rise faster than house prices to help reset housing affordability, especially in southern England.
Marc von Grundherr, director of Benham and Reeves, said: “While we’re yet to see interest rates fall there’s no doubt that the certainty brought about by a continued freeze has helped to improve market sentiment considerably.
“Despite the disappointment of the Spring Budget, buyer confidence is building and there remains a strong appetite to transact in 2024.”
