The housing sector remains locked in a buyers’ market and prices are unlikely to rise nationally this year, Zoopla claims.
While some analysts are revising their housing market forecasts amid lower inflation and falling mortgage rates, Richard Donnell, executive director of research for Zoopla insists buyers remain price sensitive.
He highlighted Bank of England data showing 45% of those with mortgages are yet to remortgage onto higher rates and said the average UK seller is having to accept offers around 95% of the asking price, so vendors must remain realistic on pricing.
He said: “Our data shows we are still locked in a buyers market, so it’s unlikely that we will see prices rise in 2024 at a national level. But at the same time, they haven’t fallen much over the last 12 months, despite mortgage rates more than trebling since 2021.
“We believe that house prices still need to adjust to higher mortgage rates, even though these are now falling and appear to be on track to get into the 4%-4.5% range later this year.
“This means sellers have to remain realistic on what someone will pay for their home and seek advice from an estate agent on how best to get their home ready to sell.”
Donnell said supply is now more than double these lows and back up to an average of 30 homes for sale per agent, closer to the pre-pandemic average.
He said asking price reductions for homes listed for sale have picked up again in January 2024, “which is a sign that house prices are still adjusting to higher borrowing costs.”
Donnell added: “They aren’t as high as this time last year but are higher than those seen in previous years, as sellers speak to their agents about how to pitch their home at the right price level to attract renewed interest.
“The proportion of sellers achieving their asking prices varies across the UK, with slightly larger discounts happening in southern England.
“Here, prices are higher than the national average and for that reason, the impact of higher mortgage rates on pricing levels has been greater than in other regions.”
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Hi zoopla, I'd like to know why you have online calculators which are still following the trend from the post covid 'boom' period. Its very misleading to sellers. We know in some areas prices have come down at least 5% so why is it still months out of date? Unless it's accurate, the valuation tool shouldn't be available.
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