The Zoopla House Price Index suggested that the 6% increase in house sales was because there were also more homes up for sale, with 13% more than the same period last year. The firm also put this down to improvements in the cost and affordability of mortgages, saying changes in mortgage affordability calculations meant people could borrow around 20% more than in 2024.
The firm said fluctuating mortgage rates had a significant impact on house sales and mortgage applications, noting that there was a sharp decline in sales when rates reached 6% in 2022 and 2023. This recovered last year as interest rates started to ease.
Zoopla’s data showed that buyer demand was 3% up on last year and the flow of new supply was 6% higher.
In May, the average house price was 1.6% up on last year at £268,250. The firm said sellers should “maintain a realistic approach to pricing their homes”, adding that the average sale was being agreed at 3% or £16,000 below the asking price.
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Regional differences
Zoopla’s UK housing market data showed that house price growth varied across different cities, with a 1.4% decline in Aberdeen and a 0.4% fall in Brighton contrasting with a 5.8% increase in Bournemouth and a 6.1% rise in Belfast.
According to the firm, house prices outside of Southern England are growing the fastest.
The strongest growth was recorded in cities in the North West, supported by a rise in employment.
In Southern England, a rise in the number of homes for sale was “keeping price growth in check”, Zoopla said. It recorded a 21% annual rise in the number of homes for sale in the South West, 17% more in London and 15% more in the South East.
In these regions, house price growth was at less than 1%, with the South East recording inflation of 0.5% and the South West sitting at 0.9%.
By contrast, there were just 3% more homes for sale in the North West and 5% more in Scotland than the same period last year, which Zoopla said explained the 3% rise in prices in the North West and the 2.9% improvement in Scotland.
Richard Donnell, executive director at Zoopla, said: “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% higher by the end of the year.”
