Zoopla: “Cheaper mortgages help sales market as Budget fears boost listings”
Zoopla has published its House Price Index, suggesting cheaper mortgages are helping sales market as Budget fears are boosting listings.
Falling mortgage rates are boosting activity in the sales market but much could be driven by Budget tax fears, Zoopla claims.
The portal’s latest House Price Index for September shows sales agreed and buyer demand are both up by more than a quarter compared with last year.
It comes as mortgage rates have fallen in recent weeks, dropping below 4% in some cases.
This appears to have boosted buyer demand, with sales 30% higher across the East Midlands and North-East.
Zoopla highlights that a third (32%) of homes for sale on the site are currently ‘chain free’ as investors and second-home owners look to sell homes amidst recent tax changes and speculation around further tax changes in the upcoming Autumn Budget.
The most common ‘chain-free’ homes are two bed houses with 41% currently listed as chain free on Zoopla. Previously, rented homes account for 13% of homes for sale on Zoopla, the portal said.
The index found that new supply rose 16% annually during September but not all homes are ‘brand’ new to the market. A fifth were previously on the market at some stage in the last two years.
Zoopla added that more than a third (37%) of sales are being agreed at more than 5% below the initial asking price as buyers remain competitive with offers.
This proportion has improved from a year ago but remains at a level that suggests low single digit house price growth ahead, Zoopla warns, with prices up just 0.7% annually to £267,100,
Richard Donnell, executive director at Zoopla, said:
“Lower mortgage rates are delivering a much-needed confidence boost to homeowners, many of whom have sat on the sidelines over the last two years.
“Market activity is up across the board and expectations of lower borrowing costs will continue to bring buyers and sellers into the market.
“Speculation over possible tax changes in the Budget and the impact of previous tax changes are continuing to add to the growth in the number of homes for sale.
“We remain in a buyers’ market and greater choice of homes for sale will keep house price inflation in check into 2025.”
Commenting on the report, Tom Bill, head of UK residential research at Knight Frank, said:
“The unfortunate irony for the property market is that mortgage rates and confidence have both been falling in recent weeks.
“Lower borrowing costs would ordinarily drive transaction levels higher, but some buyers are holding back ahead of a Budget the government has warned will be painful.
“If the Budget is better than feared or largely as expected, we expect to see a relief bounce that lasts into next spring.”
Nathan Emerson, chief executive of Propertymark, added:
“It’s positive to see further growth within the housing market. 2024 has been a year of progression that has seen changes within the wider economy help uplift the ability for people to approach the marketplace with a new level of assurance.
“We are starting to see early signs of lenders having the confidence to shift up the landscape by offering sub-four per cent mortgage deals in some circumstances, which of course sits firmly below the current base rate and points towards future confidence within the economy.”
Kindly shared by Estate Agent Today
