The UK real estate housing market is exceeding expectations despite weaker market conditions. Zoopla's latest data shows that although demand for homes is down compared to last year, it's still at its highest since October. Falling mortgage rates and a strong labor market are supporting buyer interest, leading to an increase in the number of deals being agreed upon between buyers and sellers.
The availability of homes for sale is 65% higher than last year, with the average estate agent having 25 homes available compared to 14 in the previous year. This has supported sales, with the UK on track for half a million housing sale completions in H1 2023 - a third higher than the level of sales in the years following the global financial crisis.
Sellers are being realistic by making modest downward adjustments to their asking prices and accepting discounts averaging 4% (£14,000). This is due to buyers having more options and sellers having seen sizable price gains over the last three years, giving them more room to be flexible on agreed prices.
There has been an increase of 5% in the share of sales in the bottom 40% of the market (by price) and a drop of 4% in the share of sales in the top 40% of the market. This indicates continued demand from first-time buyers or second-steppers.
Richard Donnell, Executive Director at Zoopla, said, "The housing market is arguably more balanced than it has been for more than three years. Levels of supply have recovered, and buyers and sellers are not miles apart on where they see pricing, and this means deals are being agreed at an increasing rate."
Falling mortgage rates and a strong labor market are supporting activity levels from committed movers who need to be realistic on price if they are serious about moving home in 2023. We expect to see levels of activity continue to steadily improve over Easter and into the summer and H2. Overall, the UK real estate housing market is showing positive signs of growth and increased demand.