There are currently £230 billion ($293 billion) worth of homes on the market in the UK, the highest supply of homes in eight years, which will keep property prices in check for the rest of 2024.
The supply of homes for sale is 20% higher than the same period last year, an increase of £45 billion on the same period last year. According to Zoopla, the average estate agent is looking after 31 homes for sale – the highest supply in eight years.
“The growing supply of homes for sale is evidence of the regained confidence of homeowners, some of whom have postponed their moving decisions until 2023. The quarterly house price inflation rate has increased in recent months as more sales have been agreed and prices are stable,” said Richard Donnell, managing director of Zoopla.
Agreed sales are up 13% year-on-year, and while most homes for sale are new to the market, about a third (31%) of homes for sale were marketed in 2023.
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The increase in supply comes as a recovery in the number of three-bedroom or more homes for sale occurs as existing owners return to the market, feeling more confident about making a move amid rising mortgage rates that have impacted demand.
The early parliamentary elections in early July are not expected to impact the property market. There are currently 392,000 homes in the sales pipeline and are scheduled to be completed during 2024.
An increase in abstentions is unlikely due to the election announcement, as there are no major political differences between the two major parties,” said Zoopla.
“The announcement of the election will slow the pace at which new sales are agreed, while greater choice for buyers will keep house prices in check in 2024. It is important that those seriously considering a move in 2024 price their homes realistically if they want to secure a sale,” Donnell said.
Guy Gittins, CEO of Foxtons (FXG.MU), also does not believe that the general election will harm property sales.
“Despite the announcement of a general election last week, we have not seen any deterioration in sentiment on both the buyer and seller side. In fact, more sales were agreed last week than at any other time in the same period over the last six years,” he said.
“Even the prospect of a change of government has not stopped new buyers from entering the market. Last week we had a record number of enquiries from new applicants compared to the last five years. As buyers and sellers wait for the next interest rate decision, they should take some reassurance from the fact that homeowners and potential buyers are acting confidently despite the uncertainty of the upcoming election.”
Still, the pace at which sales are being agreed is expected to slow in the coming weeks, meaning the total number of sales for 2024 could fall below 1.1 million.
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As for house prices, there has been a fall in prices across the South of England, in coastal towns and in cities where prices soared during the ‘race for space’ during the pandemic, as demand is now weaker.
In cities with below-average home prices, home prices rise because the impact of higher mortgage rates is less pronounced.
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