2024 is forecast to be a strong year for housing sales, with the total value of homes in the sales pipeline increasing by 30% to £113bn, according to Zoopla.
Rising incomes and the lowest mortgage rates in two years have led to the highest level of new sales agreed since autumn 2020.
UK house prices rose by 1% over the past year, compared with a decline of -0.9% a year ago.
The current sales pipeline, valued at £130bn, is the largest seen in four years.
First-time buyers are expected to make up the largest buyer group in 2024 at 36% of total sales, as the gap between buying and renting widens.
If Stamp Duty relief returns to previous levels in the upcoming budget, around 20% more first-time buyers will be required to pay, some paying as much as £15,000.
Transaction completions increased in recent months, particularly in the investment property sector, as sellers seek to conclude deals ahead of potential budget changes.
Richard Donnell, executive director at Zoopla, said: “It is positive to see the sustained increase in sales activity over 2024 which reflects growing confidence among 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.
“Possible changes to stamp duty relief will only create further barriers to ownership for this group who already face significant affordability constraints.”
Reaction:
Chris McLaughlin, director at Ocean Estate Agents:
“The housing market is experiencing significant variation across districts and price bands.
“In some areas, volume has grown by over 50%, but on average year-on-year growth has reached approximately 30%, largely driven by lower interest rates.
“Many sellers who transitioned to rental accommodation during the period of higher interest rates are now re-entering the market, often mortgage-free or with substantial deposits.
“Buy-to-let activity has notably declined as smaller landlords exit the market, influenced by less favourable financial conditions and increasing regulation.”
Nathan Emerson, CEO of Propertymark:
“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.
“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.
“When the Bank of England’s Monetary Policy Committee meet on Thursday next week, we hope to see further progression on potentially cutting interest rates as this will continue to improve the overall health of the economy.”
Sarah Coles, head of personal finance at Hargreaves Lansdown:
“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 mortgage rates are dropping, so that owning a typical first-time buyer home is now 17% cheaper than renting.
“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.
“A combination of support from family members and sacrifices in the name of saving can make a huge difference.
“The Lifetime ISA can also be a lifeline, offering a 25% government bonus worth up to £1,000 a year.
“HL LISA holders withdrew an average of £18,007 each for home purchases in the tax year so far – or an 8% deposit on the average first-time buyer property.
“They’ll need all this help and more from April, when there’ll be a new barrier to buying.
“We’re currently coming to the end of a stamp duty holiday – ushered in by the mini-Budget as a permanent change and then given an end date by Jeremy Hunt.
“It means there’s no stamp duty for first-time buyers on the first £425,000 of a property’s value – which applies to all homes worth up to £625,000.
“We’re not expecting Rachel Reeves to mention this in the Budget, let alone extend it. It means the stamp duty threshold for first-time buyers is expected to fall to £300,000 and only apply to properties worth up to £500,000.
“The percentage of first-time buyers paying no stamp duty would then drop from 80% to 60%, and the percentage paying partial duty will double from 14% to 28%.
“The Budget has already had an impact on the broader market, long before the speech, because rumours of capital gains tax hikes have persuaded property investors to sell up, and try to push though the sale before April while they know where they stand.
“It means the extra buyers hitting the market have plenty to choose from, so we’re seeing the number of sales rise rather than prices.”
