Zoopla has predicted there will be 1.1 million home sales in 2024, up from one million last year, as improving market conditions bring buyers back into the market.
Zoopla said there were already signs of higher activity, as it recorded a 15% annual jump in the number of sales agreed.
The property search firm said this was most evident in the North East, where agreed sales had risen by 17%, and London, where there was a 16% jump.
The number of homes put on the market also rose by 21% and buyer demand was said to be up by 11%.
Slower decline in asking prices
Zoopla said that, although sellers were lowering their asking prices, activity showed prices did not need to fall to encourage sales.
The firm said just a small proportion of sellers were making reductions in price, and while asking prices were lower than last year, they still remained above average.
It revealed the largest reductions of around 5% were evident in the South East and East of England.
Meanwhile, its data showed that estate agents were agreeing six sales per month on average, up from 5.2 last year.
“This is evidence that house prices don’t need to fall to support growing sales volumes,” it stated.
Asking prices had fallen by 0.5% annually at the start of the year, less severe than the 1.3% decline recorded in October 2023.
Overall, the average asking price was just 1.5% below the peak of £268,000 seen in October 2022.
Better mortgage rates
Nigel Bishop, of buying agency Recoco Property Search, said: “We have seen first-hand that buyer confidence has returned to some degree, particularly compared to this time last year.
“This uplift in market activity is largely driven by the availability of more affordable mortgage products. Equally, sellers have become more motivated to put their property up for sale, which is resulting in buyers having a larger pool of properties to choose from.”
Nathan Emerson, CEO at Propertymark, added: “It’s encouraging to see a year-on-year momentum within the housing market, and these figures should encourage people who were hesitant about selling their home to consider their move. Though interest rates have not started to fall yet, the Bank of England’s (BoE’s) last Monetary Policy Committee (MPC) meeting should give people confidence as they now know that their borrowing costs are unlikely to increase.
“If inflation falls as expected, we hope that the BoE will consider cutting interest rates, which will help ease the financial strain placed on the nation.”
Zoopla said mortgage rates would fall but remain above 4%, with a likely plateau at current levels.
“Buyers should anticipate 4-5% mortgage rates over much of 2024. Our consistently held view is that 5% mortgage rates are the tipping point for annual house price falls. Mortgage rates over 6% for a sustained period would lead to larger double-digit price falls.
“Mortgage rates in the 4-5% range are consistent with flat to low-single-digit price rises,” the report added.
