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Agreed Sales Increase 12% in UK Housing Market

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    Zoopla HPI Shows Increased UK Property Sales in March 2024

    The housing market has seen a 12% increase in agreed sales compared to last year, thanks to more homes entering the market and buyers gaining confidence.

    Zoopla’s latest data, released this morning, shows that UK house prices have stayed primarily steady, with a slight decrease of -0.2% this month.

    Zoopla predicts that there will be 100,000 more sales this year compared to 2023 (1.1 million in 2024 versus 1 million in 2023) as long as sellers keep their pricing expectations realistic, indicating buyers are willing to enter the market despite affordability concerns.

    What does this mean for buy-to-let properties for sale? Read on for more information.

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      What Do Increased Sales Say About Affordability in the UK Property Market?

      The uptick in sales is reflected in other data, like mortgage approvals for home purchases, which were 32% higher in February 2024 than the previous year, signalling a return to pre-pandemic levels.

      Mortgage rates remain around 4.5%, up from under 2% in 2021, impacting affordability. Buyers with a 70% loan-to-value mortgage face annual repayments 61% higher today than three years ago (March 2021), rising from £7,100 to £11,400 annually. Two-thirds of this increase is due to higher mortgage rates, while a third is because house prices are now 13% higher than three years ago.

      Mortgage repayments have increased by 50% to 70% in 2024 compared to 2021, with the highest impact in southern England. Annual repayments are over £5,000 higher in 2024 in the South West, South East, and East of England, and up to £7,500 more in London. Lower mortgage increases support market stability in regions with lower house prices.

      Therefore, if you’re looking to benefit from the current property market, paying for buy-to-let properties with cash could be a good way to go. It is worth mentioning that mortgage rates should fall further if the Bank of England lowers interest rates later this year. Why not review the useful property investment calculator created by the RWinvest team!

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      Over 60% of Properties Falling in Value

      Rising living costs and housing affordability challenges are restraining house prices in southern England.

      Zoopla’s house price indices show that 64% of homes are still experiencing annual price declines, though these are relatively modest, typically between 0% and -3%. This is an improvement from last October when 82% of homes were in declining markets.

      In southern England, the majority of homes (95-100%) are in local markets with annual price falls, with similar trends in the East Midlands (93%).

      However, there are signs of pricing improvement in six regions outside southern England. Scotland has some areas with lower prices, but nationally, prices remain stable. This is typical of the UK market, with places like the North West and North East predicted to see over 20% capital growth over the next five years (per Savills).

      Executive Director at Zoopla, Richard Donnell, said: “The rebound in sales being agreed continues for a fourth month as mortgage rates have fallen, consumer confidence improves, and home buyers have a much greater choice of homes for sale. The pipeline of sales is growing, and we expect 100,000 more people to move home in 2024 than last year.

      “There is clear evidence that house prices are firming and the pace of price falls is slowing. We don’t believe that prices will start to rise as buyers face much higher mortgage repayments than in the recent past.

      “The market is adjusting to higher borrowing costs, and what we need is continued price stability, which will create the environment for continued growth in sales and home moves. It’s important sellers remain realistic on what they can achieve for their home.”

      If you’d like to know more about regional buy-to-let investment, feel free to browse our area guides, such as:

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      Dale Barham

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      Dale is a property content writer at RWinvest. Keeping a close eye on the UK property market, Dale helps our readers stay informed and up to date on the latest market news and statistics.