0:04 AM, 28th October 2024, About 3 weeks ago
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The total value of homes in the sales pipeline has surged by 30% to £113 billion, driven by rising incomes and the lowest mortgage rates in two years to help make 2024 a bumper year.
That’s according to Zoopla’s latest House Price Index which shows the number of new sales agreed has reached its highest level since autumn 2020.
Also, the overall pipeline of sales is the largest in four years.
First-time buyers are expected to be the largest buyer group in 2024, accounting for 36% of all sales.
Richard Donnell, the executive director at Zoopla, said: “It is positive to see the sustained increase in sales activity over 2024 which reflects growing confidence amongst buyers and sellers supported by lower borrowing costs and rising incomes.
“Overall, the market remains on track for a modest 2% price increase in 2024 and 1.1m sales.
“First-time buyer numbers have recovered as mortgage rates have fallen but a sizeable deposit is still required to buy.”
He adds: “Possible changes to stamp duty relief will only create further barriers to ownership for this group who already face significant affordability constraints.”
Zoopla also points to the rapid growth in rents and the decline in mortgage rates which have shifted renting versus buying dynamics – and boosted first-time buyer purchases.
The average mortgage repayment for a typical FTB home is 17% cheaper than renting, compared to a much smaller 2% difference a year ago when mortgage rates were higher.
Also, despite a modest 1% increase in house prices over the past year, affordability pressures and a large supply of homes for sale are keeping price growth in check.
However, house prices in more affordable areas like the North East, Yorkshire and Humberside, North West, Scotland, and Northern Ireland are rising at an above-average rate.
Sarah Coles, the head of personal finance at Hargreaves Lansdown, said: “This is the year of the first-time buyer, as the horror of renting is persuading more tenants to take the leap into home ownership.
“Rents have been driven up and mortgages rates are dropping, so that owning a typical first-time buyer home is now 17% cheaper than renting.”
She adds: “Escaping the rental trap is no mean feat. Lower mortgage rates mean that once they’ve built a deposit, their monthly outgoings can be much lower.
“However, the real challenge is building a deposit at the same time as paying sky high rents.”
Propertymark’s chief executive, Nathan Emerson, said: “We have seen an encouraging transformation across the year in terms of a resilient trend of house price growth.
“Affordability and overall confidence in the sector have also seen a boost throughout the year so far.”
He added: “Considering the UK Government has an ambitious aim to deliver growth following what has been a turbulent few years, we hope that this week’s Autumn Budget will be used as a springboard to improve housing supply.
“Propertymark has long argued that Stamp Duty reform is one way to do that, especially for those wishing to downsize.”
