Property market ends on a high note with surge in sales – Zoopla

In a mixed year the property market ends on a high note, Zoopla reports.

According to its latest House Price Index, the final weeks of 2023 have recorded above-average levels of new sales with a 17% increase compared to the same time last year.

Demand still remains high at 19% but Zoopla says an increase in available supply of homes for sale is boosting choice and supporting sales at this time as buyers and sellers are becoming more aligned on pricing.

The index recorded a slower pace of annual price declines at -1.1% in November 2023, down from 7.2% a year ago.

Built resilience in the market

The 2023 property market saw cash buyers account for a third of all sales as mortgaged sales declined by a third.

Zoopla explains why the predicted huge price falls in property prices did not happen this year.

According to the house price index, the strength of the labour market has been an important factor with high growth in average earnings – but potential homeowners have undergone tough mortgage affordability testing for new borrowers since 2015 designed to stop households taking on excessive debt at a time of low mortgage rates.

It is this reason that has stopped a major housing overvaluation and built resilience in the market for many households to manage the transition this year to higher mortgage rates.

Decline in house prices modest

Richard Donnell, executive director at Zoopla said: “The housing market has been more resilient than many expected over 2023 but it hasn’t been a surprise to us.

“Mortgage regulations introduced in 2015 have stopped an over-valuation of housing which is why the decline in house prices has been modest over the year.”

He added: “House price falls have been concentrated in the south and midlands while prices are still slightly higher over the year in Scotland and Northern Ireland.

“UK housing still looks expensive by historic standards which is why we expect UK house prices to fall a further 2% over 2024 as prices and incomes re-align.”

Buyers looking further afield

First time buyers are predicted to be largest group of would-be buyers in 2024 (40%). Zoopla data reveals that the average distance buyers look to move is 4.3 miles, indicating that many focus their home move searches to local areas. Yet a quarter of potential home movers are saying that they plan to move to a different location from where they live today.

In the face of higher borrowing costs in 2024, buyers will continue to look further afield in the search for value – this is particularly the case for people living in high value markets across southern England where upsizing is the most expensive.

Zoopla data shows that almost half of would-be movers in southern regions are looking to move 10 or more miles in the search of their next home as they seek space and better value.

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