The UK’s housing market has come back to life, with May marking the most active month for home sales since the 2021 pandemic surge, research reveals.
According to Zoopla’s latest House Price Index, a combination of increased property listings, and improved mortgage affordability has spurred buyers and sellers into action, pushing sales agreements to a four-year peak.
Nationwide, the number of homes available for purchase has risen by 13% compared to last year, giving buyers more options.
Adjustments in mortgage affordability assessments have also allowed borrowers to access up to 20% more funds, boosting confidence and driving a 6% increase in sales agreements compared to May 2024.
Homes for sale
Richard Donnell, an executive director at Zoopla, said: “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 added: “There are more sales and stronger house price increases in northern regions of England and Scotland, where homes are more affordable.
“In southern regions of England, affordability continues to weigh on price inflation and the number of sales being agreed.”
He went on to predict that house prices are on track to be 2% higher by the end of the year.
House prices up 1.6%
However, Zoopla’s research shows that despite the upswing in activity, house prices have grown modestly by 1.6% over the past year.
They are now £268,250 on average, with homes typically selling for £16,000 below the asking price.
The North West is the standout, with cities like Blackburn (5.8% price growth), Wigan (4.4%) and Birkenhead (4.1%) seeing robust gains.
Manchester and Liverpool, with price increases of 2.5% and 3% respectively, are also pushing demand into surrounding areas.
Regional house price rises
In contrast, southern England’s ample housing stock – up 21% in the South West, 17% in London and 15% in the South East — has kept price growth below 1%, with regions like the South East at 0.5% and the South West at 0.9%.
Scotland and Northern Ireland are seeing stronger price rises, at 2.9% and above-average levels, respectively, due to limited supply and faster sales growth.
However, Aberdeen lags with a 1.4% price drop, reflecting weaker economic conditions tied to low investment in the oil and gas sectors.
Reaction from the property sector
Tom Bill, the head of UK residential research at Knight Frank, said: “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.
“Together with a sense that economic pressures may increase this year, it means asking prices will need to be particularly realistic to attract interest.”
Toby Leek, the NAEA Propertymark president, said: “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.
“However, with the North West becoming the UK’s most popular housing market, it shows that more work needs to be done to even out house prices throughout the country so that people living in certain regions do not get priced out of the local housing markets there.”
Matt Thompson, the head of sales at Chestertons, said: “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.
“Sellers remained motivated throughout the month, resulting in a larger number of properties available for sale.”