Property portal Zoopla’s latest house price index has revealed 0% UK house price inflation compared to a year ago. This is up from a low of -1.3% in November 2023. However, the website believes the average UK house price is set to rise by 1.5% by the end of the year.
The index shows no evidence that home buyers and sellers have been deterred by six weeks of election campaigning. According to Zoopla figures, the number of new sales agreed is 8% higher than a year ago, with demand also up by 6%. All UK regions have registered an increase in house prices, month-on-month since January.
For Zoopla, the housing market has shown great resilience over the past year given the rise in mortgage rates – from below 2% in 2021 to around 4.7% today. While higher borrowing costs have reduced house hunters’ buying power this has not resulted in sizeable price falls.
This is thought to be because low unemployment has meant a relatively small number of people struggling to pay their mortgage – despite cost of living pressures.
Looking ahead, Zoopla says that the outlook for the property market depends on what happens to mortgage rates, with any reduction in the base rate likely to result in a boost to sales.
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According to Richard Donnell Zoopla’s executive director of research: “It is positive that sales are rising despite higher borrowing costs. It shows more realism on the part of sellers and renewed, cautious confidence amongst buyers.”
He added: “Based on city forecasts for base rates, we expect mortgage rates to remain in the 4-4.5% range going into 2025. This is sufficient to support sales volumes and low, single digit levels of house price inflation.”
Read more about this story on the Zoopla website.
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