By Zoopla’s latest House Price Index has revealed that the recent hangover of uncertainty surrounding the UK’s housing market may be coming to a close.
The Index has reported that house prices increased by 4% in the last twelve months.
The increase in property prices has been triggered by a combination of factors, most notably that fixed-rate mortgages have slowly begun to fall.
In October 2022, average fixed mortgage rates peaked at 6.65% for a five-year fix and 6.52% for a two-year fix.
According to Moneyfacts, five-year fixed-rate deals are now at an average of 5.04%.
The average two-year fixed rate is now 5.35% – meaning those who agree to a current mortgage will pay less than those who accepted a mortgage in October.
Further positive news from Zoopla is that there is also a greater supply of houses on the market, 65% more than a year ago, as the average estate agent has 25 homes for sale compared to 14 in 2022.
The chronic undersupply of housing in Britain has been one of the major factors for pushing up prices last year.
However, the increase in housing supply has been a great relief for many looking to get on the property ladder.
Zoopla reported that the number of new sales agreed had risen 11% compared to 2019.
David Hannah, Group Chairman of Cornerstone Tax, gives his thoughts on why he remains confident in the UK housing market:
“The UK property market has tended to be more stable than any other global market in the world, and the recent findings from Zoopla’s House Price Index are testament to that.
Despite all the political and economic turmoil in the last 12 months, the market has shown signs of fluidity and buoyancy.
It is also crucial to remember that we must look at the bigger picture when assessing the state of the property market, not just the most recent developments – look how quickly the narrative has changed compared to the start of Q1.
There will be NO crash and NO 7-10% fall in property prices that we saw in the noughties.
Over 2023, I expect to see low to mid to single-digit growth in the UK property market.
Despite the negative narrative currently, there is an underlying pressure on the market, leading to upward pressure on prices.”
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