Number of home sales in Yorkshire has risen and a property forecast for Spring

This is also being supported by the macroeconomic environment, with mortgage rates now at 4.4 per cent for a 75 per cent loan to value for a five-year fix rate loan, down by over one per cent from a high of 5.8 per cent in June 2023.

There has also been a lift in UK consumer confidence regarding their personal finances, which is at the highest level in more than two years.

The strongest growth in sales activity continues to be in areas with more affordable house prices and this applies to Yorkshire and the Humber, where sales are up 11 per cent and where the average house price is £185,600 and the North West, up 13 per cent with an average house price of £194,500. The strongest growth in new sellers listing homes is in the South West, up 28 per cent and North East up 26 per cent.

Further evidence of improving market conditions is the narrowing in the discount between the asking price and the agreed purchase price, which is now in line with the pre-pandemic average. The average discount from asking price to agreed purchase price has narrowed from 4.5 per cent last November to 3.9 per cent in March 2024. This is the lowest level since July 2023.

This equates to a £10,000 average discount compared to a £14,250 discount in November. This reflects a combination of greater realism from sellers on their asking price and growing buyer confidence. Discounts remain larger in London and the South East, where there is an average discount to the asking price of 4.3 per cent or £19,500.

The big question is “what about interest rates” and Zoopla analysts say that greater availability of homes for sale will keep price rises in check. The average estate agent had almost 30 homes for sale in the first quarter of 2024, which is a return to the pre-pandemic average.

This means buyers have more choice and room to negotiate, especially where homes are failing to attract buyer interest. Rising household disposable incomes are expected to be the primary driver of improved housing affordability in 2024. Disposable incomes are projected to increase by 3.5 per cent over 2024, while house prices look set to remain broadly flat over the year.

The timing and scale of interest rate reductions are the other key factors that could boost market sentiment and reduce mortgage rates. Expectations of lower interest rates are already priced into fixed-rate mortgages today. Lower interest rates would likely result in further modest declines in mortgage rates but how far depends on how low money markets see base rates falling.

Mortgage rates around the four per cent range would support sales volumes but would require incomes to continue to rise faster than house prices to help reset housing affordability, especially in southern England.

Richard Donnell, Executive Director at Zoopla says: “Rising wages and falling mortgage rates have boosted consumer confidence and this is feeding into improving levels of housing market activity over the first quarter of 2024. House prices are falling at a slower rate but it remains a buyers market where there is much greater choice of homes for sale.

“We don't believe that house prices are about to increase more quickly but there is more buyer interest. Sellers need to remain realistic on where they set the asking price if they are to take advantage of improving market conditions to secure a sale and move home in 2024.”