Zoopla issues its latest House Price Index March 2024

Zoopla issues its latest House Price Index March 2024, showing housing market activity improving across all key measures, as average discount to asking price drops to 3.9% or £10,000 – the lowest level since July 2023.

Key points from publication:
    • Housing market activity improves across all key measures – led by sales agreed which are +9% compared to a year ago
    • Sellers are accepting an average £10,000 (3.9%) discount to the asking price to secure a sale. A marked improvement on the £14,250 average discount (4.5%) seen in November 2023
    • Annual house price growth has slowed to -0.3%, an improvement on the -1.4% seen in October 2023
    • Although house price growth is higher than Q3 2023 across all areas, it remains negative across southern England
    • 2024 is set to be a year of improved sales volumes and flat UK house prices – meaning a more balanced market for buyers and sellers

28 March 2024, London: Housing market activity has improved across key measures in the first quarter of 2024 including sales activity, house price growth and the supply of homes for sale, which is a fifth higher than last year. This is according to Zoopla, the leading UK property website’s latest monthly House Price Index. 

Sales activity continues to build momentum

New sales agreed are 9% higher than a year ago, with 7% more home sales agreed over Q1 2024 vs Q1 2023. This trend is encouraging more sellers to list their homes for sale with 20% more homes for sale compared to this time last year. 

Zoopla issues its latest House Price Index March 2024

This is also being supported by the macroeconomic environment, with mortgage rates now at 4.4% (Bank of England Bankstats) for a 75% loan to value 5-year fix rate loan, down by over 1% from a high of 5.8% in June 2023 – and UK consumers’ confidence regarding their personal finances at the highest level in more than two years.

The strongest growth in sales activity continues to be in areas with more affordable house prices such as Yorkshire and The Humber (+11%) where the average house price is £185,600 and the North-West (+13%) with an average house price of £194,500. The strongest growth in new sellers listing homes is in the South-West (+28%) and North-East (+26%).

Discounts to asking prices achieved narrows in first quarter of 2024

Further evidence of improving market conditions is the narrowing in the discount between the asking price and the agreed purchase price – which is now in line with the pre-pandemic average. 

The average discount from asking price to agreed purchase price has narrowed from 4.5% last November to 3.9% in March 2024 – the lowest level since July 2023. This equates to a £10,000 discount compared to a £14,250 discount in November. This reflects a combination of greater realism from sellers on their asking price and growing buyer confidence. 

This is a national trend, but discounts remain larger in London and the South East, where there is an average discount to asking price of 4.3% or £19,500. 

Zoopla issues its latest House Price Index March 2024

What’s next for interest rates and the housing market?

Greater availability of homes for sale will keep price rises in check. The average estate agent had almost 30 homes for sale in Q1 2024, a return to the pre-pandemic average. This means buyers have more choice and room to negotiate, especially where homes are failing to attract buyer interest in a timely manner. 

Rising household disposable incomes are expected to be the primary driver of improved housing affordability in 2024. Disposable incomes are projected to increase by 3.5% over 2024, while house prices look set to remain broadly flat over the year.

The timing and scale of interest rate reductions over H2 are the other key factors that could boost market sentiment and reduce mortgage rates. Expectations of lower interest rates are already priced into fixed-rate mortgages today. Lower interest rates would likely result in further modest declines in mortgage rates but how far depends on how low money markets see base rates falling.

Mortgage rates around the 4% range would support sales volumes – but would require incomes to continue to rise faster than house prices to help reset housing affordability, especially in southern England.  

Richard Donnell, Executive Director at Zoopla, says:

“Rising wages and falling mortgage rates have boosted consumer confidence and this is feeding into improving levels of housing market activity over the first quarter of 2024.

“House prices are falling at a slower rate, but it remains a buyers’ market where there is much greater choice of homes for sale.

“We don’t believe that house prices are about to increase more quickly but there is more buyer interest.

“Sellers need to remain realistic on where they set the asking price if they are to take advantage of improving market conditions to secure a sale and move home in 2024.”

Director of Benham and Reeves, Marc von Grundherr, commented: 

“While we’re yet to see interest rates fall there’s no doubt that the certainty brought about by a continued freeze has helped to improve market sentiment considerably.

“Despite the disappointment of the Spring Budget, buyer confidence is building and there remains a strong appetite to transact in 2024. 

“Of course, the higher cost of borrowing remains an obstacle, but one that buyers are now willing to tackle with the expectation that rates will fall at some point this year.

“For sellers, this has resulted in an increased level of interest and we’re also seeing a strong uplift in the number of offers being submitted.

“Previously, the ability to find a buyer in a proceedable position was a challenge in itself and so there’s no doubt that market conditions have improved in this respect. 

“Price remains the key compromise for sellers when it comes to securing a buyer in today’s market, with higher mortgage rates continuing to restrict buyer purchasing power.

“However, the gap between this purchasing power price point and seller asking price expectation has narrowed and we’re finding that sellers are more than happy to oblige in order to make their move.”


Kindly shared by Zoopla