First-time Buyers

House prices to be ‘kept in check’ by eight-year supply high

House prices to be ‘kept in check’ by eight-year supply high
Shekina Tuahene
Written By:
Shekina Tuahene

The number of homes available for sale has reached an eight-year high and should help to moderate house prices, a property listing firm said.

This rebound in homes coming to market was being driven by three- and four-plus bed properties, indicating more confidence among homemovers, as suggested by Zoopla’s house price index for April. 

The firm said there was an average of 31 available homes for sale per estate agency office, up from 26 last year. 

Although the majority of homes up for sale are new to market, some 31% were listed last year. Of the homes that have been on the market since last year, 43% have had an asking price reduction of more than 5% to draw in buyers.

More sales agreed 

Data from Zoopla showed there was a 13% rise in the number of sales agreed compared to last year, but the increase in new homes being brought to market was outnumbering this across most regions. 

This was particularly true in the South West, where there were a third more homes for sale annually. Zoopla suggested people in the region were selling up due to changes in holiday let tax and planning rules, as well as the possibility of doubled council tax for second homes. 

According to the data, buyer demand across the UK has increased by just 2% compared to the 14% rise in the flow of new supply. Additionally, there was a 20% surge in the stock of homes for sale. 

In April, house prices declined by just 0.1% annually to £264,000. Zoopla said house price growth would be flat over 2024. 

The impact of the election 

Zoopla said the announcement of the general election could stall the pace at which new sales were being agreed, especially as it aligned with the usual summer slowdown. 

However, the firm did not expect the election to have as big of an impact on the housing market as previous years, adding: “There is not a huge divide in policy between the two main parties.” 

It also said there were few specifics on proposed housing policies so far. 

Despite this, Zoopla has predicted there could be a small fall in its projected 1.1 million housing transactions for 2024. 

The firm said there were currently 392,000 homes going through the completion process, which was 3% up on last year. It said it did not expect buyers to pull out of transactions at this point. 

Richard Donnell, executive director at Zoopla, said: “The growth in the supply of homes for sale is evidence of renewed confidence amongst homeowners, some of whom delayed moving decisions in 2023. The quarterly rate of house price inflation has picked up in recent months as more sales are agreed and prices firm.

“The announcement of the election will slow the pace at which new sales are agreed, while greater choice for buyers will keep house prices in check over 2024. It’s essential that those serious about moving in 2024 price their homes realistically if they want to achieve a sale.” 

Related: Majority of buyers’ plans unimpacted by election