The latest report from property portal Zoopla reveals a significant shift in the UK housing market. For the first time in eight years, the supply of homes for sale has surged, reaching levels not seen since before the pandemic. As of April, the average estate agent’s portfolio includes 31 properties, marking a 20% increase from last year. This influx of available homes, particularly three and four-bedroom family houses, is primarily due to sellers who had previously hesitated due to fluctuating mortgage rates and uncertain market conditions.
Price Dynamics
Despite the increased inventory, house prices have remained relatively stable, with a slight decrease of 0.1% over the past 12 months. Zoopla attributes this price stability to the broader selection available to buyers, which tempers the upward pressure on prices. Richard Donnell, Zoopla’s executive director of research, notes that while supply is an important factor, “prices are really set by demand and affordability more than supply.”
The total value of homes currently on the market is estimated at £230 billion, a 25% increase from last year. This rise is not just about more listings but also reflects the substantial market value of these properties.
Regional Variations Highlighted
The distribution of homes for sale and the pace of price changes vary significantly across regions. The North East of England, for example, has seen a 22% increase in agreed sales, while Wales experienced a modest 1% rise. Southern England, including areas with high concentrations of holiday homes, has observed an increase in listings, partly driven by recent tax changes affecting holiday lets and second homes. This has led to a 33% increase in homes for sale in the South West.
Market Resilience and Expectations
Despite the burgeoning supply, the overall number of sales agreed has only risen by 13% compared to last year, indicating that growth in supply has outpaced actual sales. This trend suggests that while more people are listing their homes, the rate at which these homes are being sold is not keeping up, potentially leading to more significant price adjustments in the future.
Donnell remains optimistic, however, stating, “We expect this expansion in supply to keep house price inflation in check over the remainder of 2024.” He clarifies that while an increase in forced sales could pressure prices downward, this scenario seems unlikely at present.
The Impact of the Upcoming General Election
With the general election set for July 4, 2024, there’s speculation about its impact on the housing market. Historically, elections tend to slow market activity due to increased uncertainty. Donnell predicts only a modest impact this time, as the major political parties have not proposed dramatically differing housing policies. He anticipates that the announcement might delay some decisions until after the election, particularly for buyers not yet committed to purchasing.