May has been the busiest month for agreed home sales since the 2021 pandemic boom, when buyers rushed to complete on homes before the end of the first stamp duty holiday, according to property portal Zoopla.
Buyers are returning to the market after April’s stamp duty holiday deadline — which saw tax thresholds return to the lower levels of 2022 — and the Easter lull. Some buyers had been delaying househunts, too, at least until the financial impact of ‘awful April’ and price increases for energy, council tax, water and broadband could be fully understood.
Now, a drop in the Bank of Engand’s base rate of interest (now 4.25 per cent) and an improvement in mortgage deals available are encouraging sales, although this has not yet translated into faster price rises.
The average London house price is now £534,400, an increase of 0.6 per cent in the year to May, according to property portal Zoopla. UK house prices are £268,250 on average after an annual increase of 1.6 per cent.
Homes across the UK are selling for an average of £16,000 below asking price, meaning sellers are being encouraged to continue to price homes realistically in order to attract buyers — particularly with the number of homes for sale currently 13 per cent higher than this time last year.
An increased number of homes for sale in southern England is significantly boosting buyer choice and keeping price growth in check.
There are 21 per cent more homes for sale in the South West than a year ago, 17 per cent more in London and 15 per cent more in the South East.
Widened choice, along with affordability constraints, explains why house price growth is less than one per cent across the regions of southern England, from 0.5 per cent in the South East to 0.9 per cent in the South West, Zoopla said.
Some lenders have recently changed their mortgage affordability calculations, enabling some people to borrow higher amounts, which is supporting growth in sales.
Within England, the North West is the hottest housing market for price rises according to Zoopla. Higher home values and rents in bigger cities such as Manchester and Liverpool are pushing housing demand into nearby areas, boosting house prices.
Blackburn has seen 5.8 per cent annual house price growth, Wigan has seen a 4.4 per cent annual rise and Birkenhead has recorded a 4.1 per cent annual increase in house prices.
There are just three per cent more homes for sale in the North West of England and five per cent more in Scotland than a year ago. House prices in Scotland have seen 2.9 per cent annual growth on average.
Richard Donnell, executive director at Zoopla, said: “There are more sales and stronger house price increases in northern regions of England and Scotland, where homes are more affordable. In southern regions of England, affordability continues to weigh on price inflation and the number of sales being agreed.
“Sellers and buyers need to adopt different tactics based on where they live across the UK; however, all sellers need to keep their feet on the ground and be realistic on pricing expectations.
“We expect sales to keep rising over the second half of the year, with UK home values on track to be two per cent higher by the end of the year.”
Martin Bennett, owner of Blackburn-based Crown Estates and Lettings Agents, said: “Business is booming in Blackburn, with increased demand for properties both at the lower and top end of the market.
“From my experience, properties that are priced correctly are going under offer within two weeks of being listed, while it’s not uncommon to have 10-plus potential buyers on the first day of viewings.”
Tom Bill, head of UK residential research at Knight Frank said: “Buyers can see there is a healthy supply of property on the market this spring, which means they have become choosier.”
Matt Thompson, head of sales at London-based estate agent Chestertons, said: “There has been a stark uplift in agreed sales in May and as buyer demand remains strong, we also expect a busier-than-usual summer market.”
Sarah Coles, head of personal finance, Hargreaves Lansdown said: “There are now plenty of (mortgage) deals priced at under four per cent, which opens up affordability for so many more buyers.”
