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The number of homes available for sale in the UK has reached its highest level in eight years, according to property search website Zoopla, which forecasts that this surge in supply will help moderate house price increases in the coming year.
Zoopla’s latest analysis reveals a 20% increase in homes on the market compared to this time last year. This growth comes after a period where rising mortgage rates caused potential buyers and sellers to delay their plans. Currently, the average estate agency branch lists 31 properties, up from 26 last year and just 16 in 2022, when supply was notably limited.
Richard Donnell, Zoopla’s Executive Director of Research, highlighted the shift in market dynamics: “There is a record high supply of homes for sale, which shows renewed confidence among sellers, many of whom are also buyers. Greater choice will keep prices in check over 2024.”
For the past few years, estate agents have struggled with a persistent shortage of homes to sell. During the pandemic, intense demand for more spacious living arrangements led to rapid sales, often within hours of listing. Despite a subsequent slowdown triggered by rising mortgage rates and the market upheaval following Liz Truss and Kwasi Kwarteng’s mini-budget in September 2022, supply remained tight.
This imbalance between supply and demand has led to house prices performing better than many had anticipated at the start of 2023. However, Zoopla’s data indicates a shift, with the number of agreed sales—a key measure of demand—rising 13% year-on-year in May, against a 20% increase in supply.
Donnell predicts that house prices will remain stable, ending the year at similar levels to where they began. This outlook is more conservative compared to other forecasts, such as Pantheon Macroeconomics’ 4% increase and Capital Economics’ 3% rise.
The disparity between supply and demand is particularly pronounced in regions that saw significant population increases during the pandemic. In the southwest of England, for instance, there are now 33% more homes for sale than a year ago, including a notable rise in four-bedroom properties. Zoopla attributes this to changes in tax regulations for holiday lets and second homes, alongside the increasing trend of employers requiring more frequent office attendance.
Nationally, house prices are reported to be 0.1% lower than this time last year, although this average conceals significant regional variations. Belfast, for example, has seen a 3.6% increase in house prices over the past year, while Ipswich has experienced a 3% decline.
The housing market is increasingly divided between the north and south of the UK, with higher-priced properties in the south necessitating larger mortgages. Over the past year, house prices have dropped most sharply in Ipswich, Hastings, and Norwich, while rising most in Belfast, Burnley, and Bolton. Coastal cities that gained popularity during the pandemic, such as Hastings, Brighton, Southend, and Bournemouth, are now among the worst performers in terms of price declines.
Zoopla’s findings suggest that the influx of homes on the market will provide more options for buyers and help maintain price stability, a welcome prospect for both buyers and sellers navigating the evolving housing landscape.
