UK housing market springs back: Busiest May for home sales since the 2021 pandemic boom
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Buyers and sellers have sprung into action after Easter, with the number of sales agreed in May the highest in four years
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Most sellers are also buyers who are seizing the opportunity to agree purchases, enticed by some attractive mortgage deals and the ability to borrow up to 20 per cent more
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Increased market activity is enabling households to meet their moving ambitions, although it’s not resulting in faster price rises, which average 1.6 per cent over the last year
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Homes are currently selling for an average of £16,000 below asking price, making it crucial for home sellers to price their homes realistically
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The North West is leading the charge as England’s hottest housing market, with strong employment growth and affordability driving robust price gains in cities like Blackburn
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Southern England boasts increased housing stock and one per cent house price growth, while limited supply in the North West and Scotland has fuelled faster price appreciation, creating diverse opportunities for buyers and sellers
The housing market is seeing a renewed increase in sales, according to Zoopla’s latest House Price Index1 as buyers return to the market following the end of stamp duty reliefs and the Easter lull. The number of sales agreed in May is running at its fastest rate in four years since the pandemic boom of 2021.
This is due to an increased number of homes for sale, with 13 per cent more homes on the market than a year ago, as well as improvements in the cost and availability of mortgages. Changes to how mortgage affordability is calculated mean borrowers can afford to borrow 20 per cent more than earlier this year, which is supporting the growth in sales.
Zoopla’s house price index shows average UK house prices are 1.6 per cent higher than a year ago at £268,250, an increase of £4,330 over 12 months. To ensure continued buyer interest, sellers must maintain a realistic approach to pricing their homes, especially with 13 per cent more homes for sale than last year.
Separate data shows the average home sale is currently being agreed at three per cent or £16,000 below the average asking price, a level that has been stable over recent months2.
Sales agreed six per cent higher than in May last year
Changes in mortgage rates over the last three years have significantly impacted the annual growth rate for housing sales and mortgage applications. Sales declined sharply in 2022/23 as mortgage rates hit six per cent. The growth in sales rebounded in 2024 as mortgage rates fell, boosting demand for mortgages
Growth in sales and mortgage approvals have slowed to more sustainable levels in recent months, impacted by the ending of stamp duty reliefs in April and the Easter holidays. However, sales agreed have started to increase once again and are six per cent higher than in May last year3. Lenders are adjusting how they assess the ability of buyers to afford higher mortgage rates, with home buyers now able to borrow up to 20 per cent more. This has supported consumer confidence and, in turn, an increase in the number of sales agreed.
North West hottest housing market for price rises in England
House price growth varies widely at a city level, from small price falls in Aberdeen at -1.4 per cent, Brighton at -0.4 per cent and Bournemouth at -0.4 per cent, to prices increasing by over five per cent in Blackburn at 5.8 per cent and Belfast at 6.1 per cent. The fastest-growing markets tend to be outside southern England.
The strongest price gains are being registered in cities across the North West as employment growth boosts demand and house prices. Higher home values and rents in large cities like Manchester and Liverpool, where prices have increased by 2.5 per cent and three per cent respectively, are pushing demand into adjacent and accessible areas, boosting house prices. In addition to Blackburn, home values are rising fast in other North West cities, including Wigan (4.4 per cent) and Birkenhead (4.1 per cent).
Aberdeen is under-performing within the Scottish market, with prices down by 1.4 per cent, due to low investment in the oil and gas industry, resulting in weaker economic conditions. This price growth is likely to continue over the rest of the year as home values rise in more affordable areas.
More homes for sale across Southern England
The increased number of homes for sale in southern England is significantly boosting buyer choice and, in turn, keeping price growth in check. Areas with faster growth in sales see the number of homes for sale being eroded more quickly, limiting what is available and supporting faster house price growth.
There are 21 per cent more homes for sale in the South West compared to this time last year, with 17 per cent more in London and 15 per cent more in the South East, resulting in slower growth. This, along with affordability constraints, explains why house price growth is less than one per cent across all regions of southern England, from 0.5 per cent in the South East to 0.9 per cent in the South West.
In contrast, there are just three per cent more homes for sale in the North West and five per cent more in Scotland than a year ago. Lower availability of homes for sale, better affordability and faster growth in sales explain why house prices are three per cent higher across the North West and 2.9 per cent higher in Scotland, with above-average price rises recorded across northern England and Northern Ireland.
Richard Donnell, Executive Director at Zoopla, provides an outlook on the market: “More homes for sale means more buyers looking to move home. This, coupled with more attractive mortgage deals and changes to how lenders assess affordability, is supporting an increase in the number of sales being agreed.
“There are more sales and stronger house price increases in northern regions of England and Scotland, where homes are more affordable. In southern regions of England, affordability continues to weigh on price inflation and the number of sales being agreed.
“Sellers and buyers need to adopt different tactics based on where they live across the UK; however, all sellers need to keep their feet on the ground and be realistic on pricing expectations.
“We expect sales to keep rising over the second half of the year, with UK home values on track to be 2 per cent higher by the end of the year.”
Martin Bennett, an agent with over 30 years’ experience and the owner of Crown Estates and Lettings Agents, the longest standing independent agent in Blackburn comments: “Business is booming in Blackburn, with increased demand for properties both at the lower and top end of the market. This is being reflected in house prices, with an entry-level property in Blackburn having an average asking price of approximately £75,000 compared to approximately £50,000 two years ago.
“From my experience, properties that are priced correctly are going under offer within two weeks of being listed, while it’s not uncommon to have 10+ potential buyers on the first day of viewings.”
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