Buyers and sellers continued to return to the property market in February, and are expected to boost the number of home sales by 10% this year, according to the latest data from property website Zoopla.
All measures of activity were higher than in February 2023, the company said, with agreed sales up by 15% and buyer demand up by 11%.
As a result, the market is on track to reach 1.1m transactions across the year, up from 1m in 2023, it said.
Across the UK prices were down by 0.5% year-on-year, although this masked regional variations. In Scotland, Northern Ireland, Wales, the Midlands and the north of England prices increased, but across the south of England they fell.
While Belfast recorded a 4.3% rise in prices, in the east of England there was a 2.1% drop.
The areas experiencing falls were those with the highest prices, where buyers have been most hit by affordability problems caused by rising mortgage rates and other increased living costs.
Last summer, rates on fixed-rate mortgages reached their highest level since 2008 as the money markets responded to the rising base rate.
Since the Bank of England paused rate increases, after the move up to 5.25% in August, prices on mortgage deals had been falling, and Zoopla said this had supported the upturn in activity “along with faster growth in household incomes”.
However, it noted that the cheapest, sub-4%, mortgages were now being pulled by lenders.
“Buyers should anticipate 4-5% mortgage rates over much of 2024, consistent with flat to low single-digit price rises,” it said.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said that while the increase in activity was good news for sellers, the housing market still faces “some serious hurdles”.
She said: “Falling mortgage rates at the end of 2023 and beginning of 2024 made the key difference in boosting market optimism, and rates are starting to rise again. They’re still only roughly where they were a year ago, and the average two-year rate is still under 5.75%, but a rise may persuade some buyers to press pause.”
Coles added that in the south, excluding London, “we’re seeing the impact of relentless eye-watering price rises over the past few years. As a result, affordability is a major problem, and we’re still seeing asking prices drop significantly”.
