Property searches up 7% as more buyers return to market – Zoopla
This was the first time in a year that searches rose in every region, with the biggest increases seen in the South East and East of England.
More buyers are returning to the housing market after a quieter summer, with searches for homes up 7% year-on-year, according to Zoopla’s latest House Price Index (HPI).
This was the first time in a year that searches rose in every region, with the biggest increases seen in the South East and East of England.
Borrowing power dropped by 9% when compared to January levels due to higher mortgage rates, which peaked close to 5% in April.
Buyers now need to put down an average of £18,200 more as a deposit to keep monthly payments unchanged, rising to £35,500 in London and £10,200 in the North East.
Sales agreed are still 6% below last year.
Data showed there are 5% more homes for sale than a year ago, giving buyers more choice.
House price growth slowed to 0.9% in July, down from 1.3% in June.
Prices fell in the South, South East, South West and London, while the North West, Yorkshire and the Humber, Scotland and Northern Ireland all saw price rises.
Richard Donnell, executive director at Zoopla, said: “Many buyers have taken a ‘wait and see’ approach over the summer months in response to higher borrowing costs and political uncertainty.
“The low point for activity was mid July around the time of the World Cup final.
“Since then we have seen a steady increase in the number of people searching for a home, assessing their options ahead of the post holiday rebound in sales market activity.”
Donnell added: “This is a nationwide trend and the first time searches for homes are up across Britain this year.
“Average mortgage rates have stabilised but remain closer to 5% than 4% meaning affordability remains an important factor for many home buyers choosing their next home.
“Buyers have plenty of choice this autumn and will be able to make competitive bids for homes.”
He said: “Motivated sellers need to price carefully to attract interest and bids and seek the advice of local agents for the likely levels of demand and interest in their home as market conditions vary widely across the country.”
Reaction:
Jeremy Leaf, north London estate agent and a former RICS residential chairman:
“We are starting to see holiday returnees slowly drifting back but the market is not what it was just a few months ago.
“On the ground, modest rises in mortgage costs have reinforced the buyer’s hand and are resulting in lower offers, particularly for flats, many of which have remained unsold for some time.
“On the other hand, only relatively few sellers are recognising the new realities and negotiating as hard as they can to try to agree terms at what they regard as realistic.
“We know too, that listings will increase over the next few weeks bearing in mind a recent rise in appraisals which will further strengthen buying power.
“Looking forward, we don’t anticipate much change as speculation about potential Budget tax increases intensifies.”
Nathan Emerson, CEO at Propertymark:
“These figures suggest buyers are beginning to re-engage with the housing market after a quieter summer, with searches up across every region.
“But renewed interest should not be mistaken for a full recovery in transactions just yet.
“Affordability remains the key constraint. Higher mortgage rates are reducing buying power, while the additional £18,200 deposit needed to maintain repayments highlights the particular challenge facing first-time buyers.
“More homes available for sale is positive, giving buyers greater choice and helping keep price growth in check.
“But the regional picture remains mixed, reinforcing that the housing market is not one-size-fits-all.
“Local expertise will be crucial this autumn, helping buyers understand what they can realistically afford and ensuring sellers price their homes appropriately.
“The return of demand is encouraging, but affordability remains the biggest barrier to a sustainable recovery.”
Related
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Housing market remains subdued in July – RICS
Homes near top state schools post £40,574 premium, Yopa finds
Commuter belt house price growth outpaces every major UK city – Yopa
House prices up 0.1% in June as annual growth reaches 2%
More second-steppers rely on higher LTV mortgages – Barclays
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