The latest Zoopla House Price Index reveals a slight decrease in UK house prices, with a year-on-year fall of 0.2%, despite improvements in market activity.
As of March 2024, the average house price stood at £264,500, showing a marginal monthly increase of 0.1% but a slight annual drop of £410.
Richard Donnell, executive director of research, commented on the current market dynamics: “House prices are largely unchanged over the last year, with a -0.2% change indicating stability rather than significant fluctuation. This stability is occurring alongside enhanced market activity, with more sales and mortgage approvals noted.”
The index details various property types, showing detached houses experiencing the most significant price drop of 1.0% year-on-year, while terraced houses saw an increase of 0.6%. Semi-detached houses remained stable with no percentage change.
The report also highlights regional differences. Southern England and the East Midlands are seeing continued price declines, albeit at a slower rate, with the East of England recording the largest drop of 1.7%. Conversely, the North of England, West Midlands, Wales, Scotland, and Northern Ireland are experiencing a return to annual house price growth.
The overall UK market is showing signs of balance not seen since before the pandemic, potentially enabling more people to move homes in 2024, provided pricing remains realistic. The report predicts a 10% increase in sales completions for the year, expecting around 1.1 million sales.
Mortgage approvals have rebounded to pre-pandemic levels, with a 32% increase compared to last year, as reported by the Bank of England. Despite this, mortgage rates remain high compared to two years ago, influencing buying decisions and market dynamics.
Donnell notes: “The housing market is adjusting to the end of ultra-low mortgage rates, which has impacted buying power and led to a slower pace in house price growth. However, with expectations of interest rate cuts, there could be more stability and potential growth in sales rather than price inflation.”
Reaction
Nathan Emerson, CEO of Propertymark comments:
“The housing market is still recovering from the economic turbulence of the last three years and is going through a process of correcting itself.
“Homebuyers’ confidence and their eagerness to move home is starting to show as more sales complete and our own Housing Insight Reports indicate how positive the market is starting to look, with an 18 per cent increase in new properties coming to the market.
“Approvals for remortgaging also increased, from 30,900 to 37,700 since February, according to the Bank of England’s Money and Credit report, meaning buying and selling a home is now becoming much easier and the easing in house prices is allowing wiggle room in people’s affordability. As interest rates remain unchanged, we now hope to see them drop soon in order to further incentivise people who are desperate to get onto the housing ladder of make their next move.”
