House sales hit highest level in four years in ‘bumper’ year for market – Zoopla

House sales hit highest level in four years in ‘bumper’ year for market – Zoopla



House sales are at their highest level since 2020 as the value of homes under offer grows 30% year-on-year to £113bn.

Zoopla estimates that 306,000 homes have had a sale agreed and are working their way through the pipeline towards completion, equating to 62,000 more homes than a year ago.

A combination of lower mortgage rates and strong wage inflation is the driving force behind what the housing portal describes as a “bumper” year for sales in its October House Price Index.

 

House price inflation kept in check

A larger choice of homes available to buy is holding back house price inflation. The stock of homes available to buy is 11% higher than this time last year, while the flow of new homes being listed for sale is up 13%.

Consequently, house prices rose by just 1% month-on-month, on average. In October last year, prices had dipped by 0.9%. Regions and countries seeing above-average house price inflation of between 2% and 2.3% include the North East, Yorkshire and the Humber and the North West.

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Scotland and Northern Ireland saw average house price rises of 2.4% and 5.6% respectively.

 

First-time buyers drive sales

First-time buyers – which are set to make up the largest proportion of buyers at 36% – and movers who have been waiting for mortgage rates are behind the sales momentum, according to Zoopla.

Homeowners buying with a mortgage will account for 31% of the market and cash buyers for 27%. Landlords buying homes with buy-to-let (BTL) mortgages are on track to account for 7% of purchases.

Rents and falling mortgage rates have encouraged more first-time buyers onto the housing ladder.

The average mortgage repayments for a typical UK first-time buyer home are 17% cheaper than renting, compared to a difference of just 2% a year ago, when mortgage rates were higher.

Some 12% of homes listed for sale are being sold by landlords, which are typically bought by first-time buyers as average asking prices are usually lower than other homes listed for sale. The average asking price of a formerly rented home is £307,000, which is 16% lower than the average UK asking price of £365,000.

 

Will Reeves deal Budget blow?

However, first-time buyers could be in line for a Budget blow when Labour’s Chancellor Rachel Reeves announces her plans for the economy.

Currently, first-time buyers do not have to pay stamp duty on properties that cost up to £425,000 and pay partial stamp duty on homes worth up to £625,000. These thresholds are set to reduce to the previously lower levels in April 2025 if Reeves does not make them permanent or unveil a further extension.

Analysis by Zoopla shows that the proportion of first-time buyers who will pay no stamp duty will reduce from 80% to 60% and those paying partial stamp duty will double from 14% to 28%.

Sarah Coles, head of personal finance at wealth platform Hargreaves Lansdown, said: “This is the year of the first-time buyer, as the horror of renting is persuading more tenants to take the leap into homeownership.

“However, the real challenge is building a deposit at the same time as paying sky-high rents.”

She added: “We’re not expecting Rachel Reeves to mention [stamp duty relief] in the Budget, let alone extend it. It means the stamp duty threshold for first-time buyers is expected to fall to £300,000 and only apply to properties worth up to £500,000.”





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