Zoopla indicates that increasing the availability of homes for sale will help prevent significant price fluctuations. In Q1 2024, the average estate agent had nearly 30 homes for sale, returning to levels seen before the pandemic. This gives buyers more options and bargaining power, especially for properties needing help attracting interest from buyers quickly.
The main driver of improved housing affordability in 2024 is expected to be rising household disposable incomes. Disposable incomes are forecasted to increase by 3.5% throughout 2024, while house prices are anticipated to remain relatively stable.
Additionally, the timing and extent of interest rate cuts are crucial factors that could enhance market confidence and lower mortgage rates. Anticipations of reduced interest rates are already factored into fixed-rate mortgages today. Further decreases in interest rates would likely lead to slight reductions in mortgage rates, although the extent of these reductions depends on how much base rates are expected to drop in money markets.
Executive Director at Zoopla, Richard Donnell, 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 a 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.”
For more property guidance, check out some of our buy-to-let area guides: