House prices rising slowly but 2024 still a ‘bumper year’

2024 is set to be a “bumper year” for house sales thanks to rising real incomes and lower mortgage rates, according to Zoopla’s latest house price index.

The level of new sales has increased to its highest level since late 2020, the survey showed. There are 306,000 homes currently working through the buying process, 26 per cent more than last year.

The total value of these sales hit £113bn, 30 per cent higher than this time last year when a spike in mortgage rates reduced the number of sales agreed over the second half of 2023.

Zoopla said momentum in new sales “remains strong” and will continue into December, supporting by high supply of new homes. Many of the most recent sales will complete in the first half of 2025.

The housing market has been supported by the long-awaited start of the rate cutting cycle, with the Bank of England lowering rates for the first time since the pandemic in August.

Markets expect at least one more rate cut this year and some economists expect the Bank to pick up the pace in 2025. This has helped lower mortgage costs have new buyers.

Despite the increase in activity, house prices have increased just one per cent over the last 12 months, compared to a 0.9 per cent fall a year ago.

“Price inflation is being held back by a large choice of homes for sale and affordability pressures which are keeping buying power in check,” Zoopla said.

Richard Donnell, executive director at Zoopla said: “It is positive to see the sustained increase in sales activity over 2024 which reflects growing confidence amongst buyers and sellers supported by lower borrowing costs and rising incomes.”