As demand soars, the supply of homes for sale is beginning to turn a corner, with new listings of homes for sale at 5% above the five-year average, according to Zoopla’s house price index
Britain’s property market had the busiest start to the year since 2016, with sales agreed so far this year matching levels seen at the start of 2021.
As demand soars, the supply of homes for sale is beginning to turn a corner, with new listings of homes for sale at 5% above the five-year average, according to the latest data from Zoopla’s house price index.
This meant that in January, half of all properties where sales were agreed were snapped up within three weeks of coming to the market, compared to a third of homes during the same period in 2021.
But, as demand continues to outpace supply, the average house price now stands at £244,100 ($326,211) — a rise of 7.8% in the year to the end of January, and a rise of around £80,000 ($106,755) over the last decade.
This is decline from 8% in December, and the three-monthly rise is at its lowest since August 2020.
Last year, some 1.5 million home sales were secured, even as stock levels declined. Zoopla anticipates 1.2 million home sales in 2022.
Zoopla warned that the rising economic headwinds, including the increasing cost of living and rising mortgage rates will start to put the brakes on house price growth. It forecast an average house price growth of between +2% and +4% at the end of the year.
The sheer level of activity in the market in recent years eroded the stock of homes for sale, said Grainne Gilmore, head of research at Zoopla.
She said: The imbalance between high demand and supply will take much longer to unwind, and this imbalance will continue to underpin pricing in the coming year.
Despite total stock levels staying below the medium term average, this rise in new supply indicates green shoots of recovery for stock levels, with new listings rising for every house type in the first two months of the year compared to 2021.
The real estate firm said this signals a possible return to pre-pandemic stability for the rest of the year.
Zoopla expects the rate of annual house price growth to ease over the course of 2022, as economic headwinds, including mortgage rate rises and the rising cost of living, put the brakes on price rises.
Overall, we forecast average price growth of 3.5% by the end of the year across the UK, she added.