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Property prices up 2.4% over the last year

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Pent up demand and a lack of properties on the market are currently supporting house prices, but for how long?
Property prices up 2.4% over the last year

UK house price growth is up 2.4% on the year, said Zoopla, and has increased from 1.6% at the start of 2020.

The property price portal said that the city with the highest rate of house price growth over the past 12 months is Nottingham (4.3%), followed by Manchester (3.9%).

However Oxford (-0.6%) and Aberdeen (-2%) have recorded modest price falls.

Zoopla also noted that sales agreed since the housing market reopened will lead to price rises in the next three months as they complete. It also pointed to a significant lack of supply supporting house price growth in the short term. Both factors are predicted to push price falls back towards the end of 2020.

Richard Donnell, director of research & insight at Zoopla, said: “We see returning pent up demand and new buyers entering the market creating upward pressure on prices in the face of a lower supply of homes for sale which has been exacerbated by the lockdown. House price growth is set to hold up in the near term and we expect the downward pressure on prices to come in the final months of the year as demand weakens.

“While the average asking price for homes marked as sold on Zoopla are 7% higher than a year ago this is down to an increase in sales in higher value markets where activity has remained subdued in recent years. We do not expect the rate of growth in the Zoopla House Price Index to reach this level, rather it is expected to hold steady at 2%.

Regional boost

Sales are expected to rebound in Scotland, Wales and Northern Ireland as these markets reopen and pent up demand is released. Although these countries account for less than a fifth of UK housing sales, Zoopla noted that more activity will support demand and market activity in the immediate term.

Donnell added: “The Welsh housing market opened this week and levels of demand have already returned close to the levels seen in England in anticipation of the market reopening. Scotland, where the market reopens on 29 June has also seen demand rise back to pre-COVID levels but sales remain more than two thirds lower and are expected to rebound in the coming weeks.”

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