Yorkshire house prices edge up and a forecast

Its major cities index shows Newcastle top the table with a 1.5 % growth in values over the year from April 2023 ton April 2024, while Leeds and Sheffield saw a 1.3% rise just below Manchester which saw a 1.4 per cent uplift.

There are more homes for sale than at any point in the last eight years as sellers return to the market in growing numbers. The average agent has 31 homes for sale, up 20% on this time last year.

Zoopla analysts say that many existing homeowners delayed moving decisions unsure about the impact of higher borrowing costs on house prices and buyer demand. Now, the slight decline in mortgage rates, together with rising sales volumes and firmer pricing, has brought more sellers back into the market, many of whom are also buyers.

Most homes for sale are new-to-market. However, almost a third of homes currently available for sale were also listed for sale in 2023 but failed to find a buyer. Analysts say this is not surprising, as demand for homes fell over the second half of the year as mortgage rates jumped higher.

Two-fifths of these homes that had been on the market in 2023 have had their asking price cut by more than 5% to attract demand. This highlights the importance of pricing homes correctly at the outset, rather than aiming too high and not attracting buyers.

The number of homes having a sale agreed is 13% higher than this time last year. Sales volumes are continuing to recover back towards the long-run average. Sales agreed have grown 22% across the North East but are up by just 1% in Wales.

The other notable trend is that the number of homes for sale has generally grown faster than the increase in sales agreed. This is replenishing the supply of homes for sale and delivering buyers more choice. In most areas supply is growing faster than sales agreed.

The South West of England has recorded a 33% increase in homes for sale compared to last year, with an above-average increase in the expansion in 4-bed homes for sale. Tax changes for holiday lets and the prospect of double council tax for second homes are likely to be encouraging some owners to sell.

This exacerbates the expansion in homes for sale across the South West, which has the highest concentration of holiday homes.

Zoopla says that while growth in available supply is welcome news, after several years where scarcity of supply limited sales volumes and pushed up house prices, a return to greater availability will support the growth in sales.

However, analysts expect this expansion in supply to keep house price inflation in check over the remainder of 2024. It is still slightly negative at minus 0.1 per cent and while there has been an increase in house price inflation over the last quarter, up 0.4%, in response to more sales and firmer pricing, this quarterly growth rate has slowed over the last month. Zoopla expected UK house price inflation to be flat in 2024.

There are variations depending on location. Homes in coastal areas and those that attracted an inflow of demand during the pandemic are registering above-average price falls, as demand weakens.

However, the impetus to move remains for many households. In particular, first-time buyers are looking to escape the rapid growth in rents in the private rented sector. Similar is true of upsizers, many of whom delayed moving last year when mortgage rates moved higher.

Zoopla say that the election announcement is likely to stall the pace at which new sales are being agreed in the coming weeks, as we run up to the start of the summer slowdown, while those who are earlier in the process may look to delay decisions until the autumn after the election is over.

Overall, the portal’s analysts do not see the election having as big an impact as in previous years, particularly as it believes there is not a huge divide in policy between the two main parties.