Zoopla expects UK house prices to rise by 2% over the course of 2024, as the market makes a moderate recovery from a slump in 2023.
The number of sales agreed are 16% higher than a year ago, with sales up across all regions and countries of the UK.
It’s not expected that the new government will have a big impact on the performance of the housing market in the next 12-18 months, however rate cuts by the Bank of England are expected to mildly improve confidence and activity.
Richard Donnell, executive director at Zoopla, said: “The housing market is starting to hot up after a stone cold 2023.
“There are clear signs of growing confidence amongst buyers and sellers with many more homes for sale and buyers paying an increased proportion of the asking price. We expect to see more sales but house price inflation will be kept in check by more supply and affordability pressures keeping a lid on buying power, especially across southern England.
“While we don’t expect to see any impact from the new government, or the King’s Speech specifically, in the next 12-18 months, it is possible we will in the longer term. The housing market is essentially an extension of the UK economy.
“Government policies focused on economic growth that feeds into income growth will help support both home buyers and renters. The Bank of England will have more impact on the market in the short term and much depends on the timing of the first base rate cut.”
Buyers are currently paying 96.8% of the asking price, the highest for 18 months, and an average of £16,600 below the asking price.
Tom Bill, head of UK residential research at Knight Frank, said: “Demand and transaction volumes should increase in the second half of the year as the first rate cut since March 2020 becomes imminent.
“As more mortgages fall below the psychological threshold of 4%, we expect UK house prices to rise by 3% in 2024.
“One risk on the horizon is the possibility of tax rises in Labour’s first Budget, which could dampen demand, particularly in higher price brackets.
“The other is the Renter’s Reform Bill, which may result in increased supply in the sales market if the new rules are punitive for landlords.”
