House prices have risen by 1.4% over the first seven months of 2024, which compares to 0.1% growth in the first seven months of 2023.

Newly published figures by Zoopla indicated that both buyer demand (+20%) and sales agreed (+23%) are up on last year, when a spike in mortgage rates slowed demand and market activity.

According to the latest Zoopla House Price Index, while the UK’s housing market is steadily recovering from the impacts of higher mortgage rates, record levels of supply mean “caution is needed” among sellers when it comes to pricing their home.

The supply of homes for sales has risen to a seven-year high following this year’s house price rises, and more sales agreed as a result.

Zoopla’s figures indicated that house prices are on track to be 2.5% higher over 2024. The annual rate of growth is lower at +0.5%, as it includes price falls over the latter part of 2023.

“Momentum in the sales market continues to build as mortgage rates drift lower and more and more sellers gain the confidence to list their home for sale,” said executive director at Zoopla, Richard Donnell. “Buyers have much greater choice which will support sales numbers, but this will keep prices rises in check.”

Zoopla also stated that buyers are remaining “price sensitive” as their purchasing power has been eroded by higher mortgage rates. While this is slowly being offset by faster income growth, the property portal believes there is “further to go” to fully repair affordability.

This would explain why one in five homes had the asking price reduced by 5% or more in August to attract greater buyer interest.

Donnell added: “Buyers have less purchasing power than two to three years ago and remain price sensitive meaning sellers can’t afford to get ahead of themselves on where to set the right price for their home. If you need to cut the asking price by 5% or more then your home will take twice as long to sell or may not sell at all.”

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