Record-Breaking Activity in Housing Market: Buyers Disregard Stamp Duty Increase to Make May a Four-Year Peak Month
Busiest Property Market in Four Years: A Bold Comeback in May, According to Zoopla
In a surprising turn of events, the property market has witnessed its most active May in four years due to increased sales and a growing number of homes up for grabs, as suggested by analysis from the property portal Zoopla.
To the relief of both buyers and sellers, the market has shown resilience in the face of the conclusion of stamp duty reliefs, proving that the appeal of real estate remains strong. In fact, the number of sales agreements in May is currently running at its fastest pace since the pandemic-driven boom of 2021, the analysis indicates.
The increased number of properties available on the market, with 13% more homes monitored by Zoopla compared to the previous year, is widely believed to be a primary factor fueling this surge in sales.
Moreover, tumbling mortgage rates, which have been on a downward trend since April, coupled with mortgage affordability rule adjustments among various lenders, have enabled more customers to secure larger loans than before. According to Zoopla's estimates, borrowers can now afford to take on 20% more debt compared to earlier this year, thereby supporting sales growth.
Despite the upsurge in sales, price growth across the U.K. is largely static compared to last year, with sellers typically settling for offers below the listed price. On average, homes are selling for £16,000 less than the asking price, as reported by Zoopla.
On a regional basis, while more sales are being made, the housing market is behaving quite distinctly in the North and the South. For instance, the North West is leading the charge with robust price gains in cities like Manchester, with the Scottish market closely following suit. Meanwhile, affordability constraints and higher supply levels in southern regions are causing slower price inflation.
Commenting on the situation, Richard Donnell, executive director at Zoopla, stated: "An enhanced supply of homes attracts more potential buyers, stimulating an increase in sales. This, combined with more attractive mortgage deals and updated affordability assessment rules, is propelling the growth in sales agreements."
"However, house price growth stays subdued when compared to the past year, with sellers generally expecting offers below the listing price," he added.
It is important to note that, despite the regional differences in house price growth, there are pockets of significant increases in several northern areas. The locality of Blackburn with Darwen in Lancashire, for instance, has recorded a staggering 14.4% annual house price increase, translating to an average rise of around £20,000 for properties, as highlighted by Zoopla's analysis.
Martin Bennett, the owner of Crown Estates and Lettings Agents in Blackburn, emphasized the strong demand for properties at both the lower and higher end of the market. "The average entry-level home in Blackburn has an asking price of approximately £75,000, which is around £20,000 higher than two years ago," he said, adding, "Properties competitively priced usually receive multiple offers within two weeks of being listed."
The North-South divide in real estate trends is becoming more evident, and Zoopla's analysis aligns with exclusive data shared with This is Money last week by the estate agent Hamptons. The analysis revealed that some property hotspots in the Midlands and the North have recorded double-digit house price growth, far outpacing their southern counterparts.
- The surge in sales in the property market, as indicated by Zoopla's analysis, can be partially attributed to the increased number of mortgages available due to tumbling mortgage rates and mortgage affordability rule adjustments.
- Despite the overall growth in the property market, the housing-market behavior varies significantly between the North and the South, with cities like Manchester in the North West showing robust price gains, while affordability constraints and higher supply levels in southern regions lead to slower price inflation.
- The regional analysis by Zoopla also highlights pockets of significant house price increases in several northern areas, such as Blackburn with Darwen in Lancashire, where houses are now selling for an average of around £20,000 more than two years ago.
- As evidenced by Martin Bennett, the owner of Crown Estates and Lettings Agents in Blackburn, the demand for properties at both the lower and higher end of the market is strong, with competitively priced properties receiving multiple offers within two weeks of being listed.
