House prices ‘largely unchanged’ compared to last year, Zoopla figures indicate

UK house prices in March were 0.2% down on the same time last year, according to Zoopla.

The drop, worth £410 in cash terms, took the average house price in the country down to £264,500.

According to Zoopla’s latest house price index, “house prices are largely unchanged” and the market is more balanced than at any point since the start of the pandemic.

However, the residential data firm’s figures for March 2024 indicate that 64% of UK homes are in local authority areas where house prices are falling on an annual basis.

According to the property website, this is lower than the 82% recorded in October 2023, “and the scale of price falls is relatively modest”.

The East of England has seen a year-on-year decrease in its house prices of 1.7%, the largest fall out of all the UK regions.

>> See also: Annual house price growth slows to 0.3%, says Halifax

>> See also: ‘Cautious optimism’ about 2024 as house prices rise in January

House prices in the South East experienced a decrease of 1.6% compared to March last year, while average property prices in the South West fell by 1.4%.

Market conditions have improved in Northern Ireland, Scotland and the North of England. In Northern Ireland, house prices increased by 4.4% year-on-year.

In Scotland, property prices increased by 1.9% during the year leading up to March 2024, while in the North East, prices rose by 1.3%.

According to Zoopla’s latest report on house prices, the housing market is seeing a sustained increase in property sales, with 12% more agreed sales compared to the same period last year.

Furthermore, the number of agreed sales has been higher than the same time last year for the past four months.

Mortgage approvals have rebounded to pre-pandemic levels. Bank of England (BoE) figures showed that there were 32% more mortgage approvals in February 2024 than a year earlier.

However, monthly mortgage costs have soared over the past few years. Comparing a sub 2% mortgage rate from March 2021 to the current 4.5% average, the annual mortgage cost jumps from £7,100 to £11,400, a 61% increase.

The current Bank of England base rate is 5.25%, however, cuts are expected later in the year. When inflation is going up, the BoE may raise its base rate to encourage people to borrow less. 

Richard Donnell, executive director of research at Zoopla said: “The housing market continues to adjust to higher mortgage rates. Sales volumes are rising and house prices are flat. What the market needs most is continued price stability which will create the environment for continued growth in sales.” 

Data from Halifax published today indicated that demand for smaller homes has driven an increase in house prices in the early months of this year.

Halifax figures show that prices of flats and terraced houses jumped by 2.7% and 2.6% respectively in the year to February 2024, while semi-detached properties increased by 1.7%.

Tom Bill, head of UK residential research at Knight Frank said that the increase in demand for smaller homes can be attributed to higher mortgage rates, which mean tighter budgets.

Bill said: “As a result, first-time buyers, growing families and people moving for work have driven demand in lower price brackets over the last year”.