House prices are set to rise by 1.5% by the end of the year, as the average house price in the UK reached £265,600 in June, Zoopla has revealed.
The firm’s house price index showed that property prices jumped by 0.1% year-on-year, although this is expected to improve as the year progresses.
Furthermore, there was a 16% annual increase in the number of agreed sales, because of a greater supply of homes.
Zoopla said that modest price rises are expected to help motivate sellers to list their homes for sale, but it added that a return to faster house price inflation would be "unwelcome", due to affordability remaining a constraint on market activity, especially in southern England.
It stated that the housing market requires a 12-to-24-month window where incomes rise faster than house prices to help reset affordability. Incomes are set to rise by 4.5% in 2024, with Zoopla expecting incomes to continue to rise faster than house prices in 2025.
In terms of regional house prices, there was a North/South divide in annual changes, with the East of England (1.2%), South East (1%) and South West (0.7%) all recording drops in house prices.
London also recorded a house price drop of 0.3% year-on-year.
Meanwhile, the North West (1.5%) was the best performing English region, alongside the North East (1.3%) and Yorkshire and Humber (0.6%).
Across the home nations, Northern Ireland (3.9%), Scotland (1.4%) and Wales (1.1%) all recorded annual house price increases.
Risk director at Legal & General Surveying Services, Malcolm Webb, said: "It’s likely the rise in house prices reflects growing demand as a result of fresh cuts from lenders and increased confidence in the market. However, it is also a reminder that buying a house is one of the biggest financial purchases many people will undertake in their lifetime, and should not be a decision that is taken lightly, or without seeking the correct professional advice.
"Perhaps one of the more overlooked aspects of the homebuying process is commissioning a home survey, with only one in ten choosing to do so. With average house prices now sitting at £265,600 on average, it’s more important than ever to get a survey to ensure they have as much information as possible about the true condition and value of the property they are buying."
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