Increased housing supply and improved affordability drive buyer demand
Home sales reached their highest pace in four years this May, according to the latest House Price Index by Zoopla.
A combination of increased housing stock and improved mortgage conditions has led to a renewed uptick in market activity, following a lull triggered by the end of stamp duty reliefs and the Easter break.
The number of homes available has risen by 13% year-on-year, which, along with easing mortgage affordability calculations, has supported more buyers entering the market. Under new lending criteria, borrowers can now access around 20% more funding than earlier in the year.
UK house prices are now averaging £268,250, a 1.6% increase from May 2024, representing a £4,330 rise over the year. While more stock on the market has offered greater choice to buyers, sellers are being urged to remain realistic on pricing. On average, agreed sales are closing at 3%, or £16,000, below asking price — unchanged from recent months.
Compared to May 2023, sales agreed are up by 6%, a recovery from the slump seen in 2022 and 2023 when rising interest rates curbed demand. Falling mortgage rates since have contributed to stabilised sales and approvals.
“More homes for sale means more buyers looking to move home,” said Richard Donnell (pictured), executive director at Zoopla. “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.”
Regional variations in price performance remain stark. Cities such as Blackburn and Belfast posted annual increases of 5.8% and 6.1% respectively. The North West continues to outperform other regions, with places like Wigan (4.4%) and Birkenhead (4.1%) seeing robust growth. Manchester and Liverpool also recorded moderate gains of 2.5% and 3% respectively.
“There are more sales and stronger house price increases in northern regions of England and Scotland, where homes are more affordable,” Donnell noted. “In southern regions of England, affordability continues to weigh on price inflation and the number of sales being agreed.”
In contrast, markets like Aberdeen (-1.4%), Brighton (-0.4%), and Bournemouth (-0.4%) experienced small price declines. Aberdeen’s performance reflects ongoing weakness in the oil and gas sector, affecting local economic conditions.
Southern England has seen a significant increase in listings — up 21% in the South West, 17% in London, and 15% in the South East. This rise in supply, coupled with affordability challenges, has capped annual price growth below 1% across these regions.
Northern England and Scotland, however, have seen smaller increases in housing supply — just 3% and 5% respectively — supporting stronger price growth. House prices are up 3% in the North West and 2.9% in Scotland, outperforming national averages.
Zoopla forecasts home values to rise by around 2% over the remainder of the year as market momentum continues.
“Even during a time of economic turbulence, it is encouraging to see that the housing market is the busiest it has been since May 2021, and that house price inflation remains stable,” said Toby Leek, president of industry body NAEA Propertymark. “It shows that more work needs to be done to even out house prices throughout the country, so that people living in certain regions do not get priced out of the local housing markets there. It is vital that government policies across the UK are geared towards that aim.”
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