Amid an improved sentiment, the UK witnessed a surge in property sales and demand, marking a nearly one-fifth increase in the final weeks of 2023 compared to the previous year, as revealed by a survey conducted by property website Zoopla. December recorded a 17% rise in newly agreed-upon sales and a 19% uptick in demand, measured by prospective buyers reaching out to agents.
Amid an improved sentiment, the UK witnessed a surge in property sales and demand, marking a nearly one-fifth increase in the final weeks of 2023 compared to the previous year, as revealed by a survey conducted by property website Zoopla. December recorded a 17% rise in newly agreed-upon sales and a 19% uptick in demand, measured by prospective buyers reaching out to agents. The influx of homes for sale is broadening choices and bolstering sales activity, with an annual house price decline of 1.1% across the country and a steeper fall of 1.5% in London, reaching an average price of £536,800.
Cash transactions constituted a third of all sales, while mortgage-involved property sales experienced a one-third decline due to elevated mortgage rates. Despite the Bank of England's series of base rate increases, with the rate standing at 5.25% by August, inflation slowdown to 3.9% has sparked expectations of upcoming rate cuts. Mortgage rates have already dipped, averaging 5.95% for a two-year fix and 5.55% for a five-year fix, according to Moneyfacts.
Zoopla's Executive Director, Richard Donnell, highlighted the resilience of the housing market in 2023, attributing it to mortgage regulations implemented in 2015, preventing an overvaluation of housing. Despite concentrated house price falls in the south and Midlands, Scotland and Northern Ireland still experienced slight increases over the year. Donnell anticipates a further 2% decline in UK house prices in 2024, aligning with incomes.
Zoopla's projection for the coming year envisions a million property sales, with first-time buyers leading the charge, constituting two-fifths of the total. Nathan Emerson, Chief Executive of Propertymark, expressed optimism, acknowledging the housing market's turbulence driven by high inflation and subsequent interest rate hikes. As inflation subsides, the anticipation is for lower interest rates, signaling a potential resurgence in the UK housing market.
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