Properties ‘sold subject to contract’ have hit a four-year high as 13% more homes have been recorded on the market than a year ago, according to the latest Zoopla house price Index.
The North West is leading the charge as England’s hottest housing market, with strong employment growth and affordability driving robust price gains in cities like Blackburn.
Shot in the arm
A cut in interest rates of 0.25% by the Bank of England earlier this month gave a welcome shot in the arm to the property market.
The Bank reduced the base interest rate to 4.25% in what could be the first in a series of cuts this year.
Also, the re-emergence of zero-deposit mortgages is giving fresh impetus to first-time buyers after their numbers fell dramatically in the aftermath of the end of the Stamp Duty holiday in April.
Mortgage lenders April and Gable are both now offering 100% mortgages, which is a trend that may bring more people within sight of a home loan.
Scrap checks
There was also a boost as the Financial Conduct Authority’s unveiled plans to scrap affordability checks for homeowners looking to remortgage.
And data from TwentyEA released last week showed there were nearly 105,000 reductions in price in April as the market reacted to the Stamp Duty deadline passing.
We expect sales to keep rising over the second half of the year.”
Richard Donnell, Executive Director at Zoopla, says: “More homes for sale means more buyers looking to move home.
“This, coupled with more attractive mortgage deals and changes to how lenders assess affordability, is supporting an increase in the number of sales being agreed,” he says.
“We expect sales to keep rising over the second half of the year, with UK home values on track to be 2 per cent higher by the end of the year.”
Martin Bennett, Owner of Crown Estates and Lettings Agents in Blackburn, says: “Business is booming in Blackburn, with increased demand for properties both at the lower and top end of the market.”
Industry reaction
Toby Leek, President at NAEA Propertymark, says: “Even during a time of economic turbulence, it is encouraging to see that the housing market is the busiest it has been since May 2021, and that house price inflation remains stable.
“This news demonstrates that there is still an appetite for housing as inflation in general continues to impact the wider economy.”
Tom Bill, Head of UK Residential Research at Knight Frank, says: “Buyers can see there is a healthy supply of property on the market this spring, which means they have become choosier.
“Stamp duty has also become more expensive since April, especially for second homes, which has increased the mood of hesitation,” he says.
“Together with a sense that economic pressures may increase this year, it means asking prices will need to be particularly realistic to attract interest.”
Matt Thompson, Head of Sales at Chestertons, says: “Some house hunters paused their search amid the Easter holidays, but were quick to resume their activity in May.
“Buyer motivation was further boosted by the Bank of England’s decision to cut interest rates to 4.25%, which even led to more first-time buyers entering the market.”