Renewed interest comes as sales agreed fall 6%
Buyers are beginning to re-engage with the housing market after a quieter summer, with searches up across every region for the first time in a year, according to August’s house price index from Zoopla.
Zoopla’s figures show the number of people searching for homes to buy is up 7% YoY, with more people searching in every region for the first time since last August and activity strongest in the South East, up 8.9% and the East of England, up 8.5%. The North West (+0.7%) saw the smallest increase in searches.
The rise in interest is despite would-be home buyers facing a 9% fall in buying power compared to January as a result of higher mortgage rates. Zoopla found that the average buyer needs an additional £18,200 for their deposit to keep mortgage payments the same as at the start of the year and nearly twice that (£35,500) in London.
Affordability remains a challenge
However, renewed interest should not be mistaken for a full recovery in transactions just yet, according to Nathan Emerson, CEO at Propertymark.
“Affordability remains the key constraint,” he said. “Higher mortgage rates are reducing buying power, while the additional £18,200 deposit needed to maintain repayments highlights the particular challenge facing first-time buyers.”
Sales agreed fell 6% YoY, but the gap to last year is starting to close, according to Zoopla. The number of homes on the market is up 5% on the same time last year.
House price growth, meanwhile, cooled to +0.9% YoY in July, compared to +1.3% in June, with declines most evident in the south, ranging from 0.3% in the South East to -1% in London.
Prices continue to rise across most of the North and Midlands, however, up 1.7% in Yorkshire and 3.1% in the North West, while Northern Ireland (+5.4%) sees the highest year-on-year increase.
Richard Donnell, executive director at Zoopla, said: “Many buyers have taken a ‘wait and see’ approach over the summer months in response to higher borrowing costs and political uncertainty.
“The low point for activity was mid-July around the time of the World Cup final. Since then, we have seen a steady increase in the number of people searching for a home, assessing their options ahead of the post-holiday rebound in sales market activity. This is a nationwide trend and the first time searches for homes are up across Britain this year. “
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