The latest data from Zoopla reveals that the property market is becoming increasingly flooded with listings. This surge in supply is providing buyers with significantly more options than they had a year ago.
According to Zoopla, there are currently 11% more homes for sale compared to the same period last year. As a result, the average estate agent now has 33 properties listed, up from 29 in 2022. This increase reflects growing supply and changing dynamics within the housing market.
The number of homes on the market is expected to rise even further as the spring selling season gains momentum. Historically, nearly 30% of property listings launch between March and May, a time when activity typically picks up.
For home buyers, this surge in listings translates to greater choice, which strengthens their position when negotiating with sellers. A larger selection of homes on the market often leads to more competitive pricing and potential room for negotiation.
The increased supply of homes is already having a noticeable impact on house price trends. With more properties available, the pace of house price growth is starting to slow.
This shift towards a more buyer-friendly market comes after years of intense competition, where limited supply and high demand pushed prices to record highs. Now, with more properties to choose from, buyers are in a stronger position to secure favourable deals.
The trend is likely to benefit first-time buyers and those looking to upsize or downsize, as they may encounter less bidding pressure and more opportunities to negotiate.
Overall, the growing supply of homes signals a change in the housing market’s dynamics, as buyers begin to gain the upper hand after a period of rapid price increases and fierce competition.
The annual rate of house price growth dropped to 1.8% in February, down slightly from 1.9% in January. According to Zoopla, this decline is expected to continue over the coming months due to a growing number of homes on the market and increasing stamp duty costs.
From 1 April, the nil-rate threshold for stamp duty – the level below which no tax is paid – will return to its previous level of £125,000, down from the temporary £250,000 threshold introduced in 2022. This change will make buying homes more costly for many buyers, especially those not purchasing their first property.
First-time buyers will also be affected, as their nil-rate threshold will decrease from £425,000 to £300,000. This change could significantly impact their budgets, especially in higher-priced areas.
To illustrate the impact, consider a home mover buying a property priced at £400,000. Before the stamp duty changes, they would have paid £7,500 in tax, but from April, that amount will rise to £10,000. Similarly, a first-time buyer purchasing the same property would go from paying nothing to facing a £5,000 stamp duty bill.
Richard Donnell, executive director at Zoopla, noted that house price growth is likely to slow further as the combination of increased housing supply and higher stamp duty costs affects the market. While moderate price growth is necessary to encourage sellers and keep the market moving, he emphasised that buyers may begin adjusting their offers to reflect these changes.
Donnell also advised households planning to sell their homes in 2025 to be cautious when setting their asking prices. With a growing number of properties on the market, realistic pricing will be key to attracting sufficient interest and achieving a sale.
Another factor influencing housing supply is the impending rise in council tax on second homes. From 1 April, around 150 councils across the UK are expected to double council tax rates on second homes, particularly in areas where such properties are common, such as the South West of England.
This measure is already having an effect in some second-home hotspots. For example, house prices have fallen by 0.8% in Truro and 0.7% in Torquay, areas where higher council tax rates have already been implemented. This trend suggests that additional properties may soon enter the market, further boosting supply and easing some of the upward pressure on house prices.
In addition to the growing supply of homes on the market, mortgage rates have remained relatively high this year. Most buyers are securing rates between 4% and 5%, limiting their overall purchasing power.
According to Zoopla, the average mortgage rate for a five-year fixed deal currently stands at 4.4%. This marks an increase from the 4% average seen in late 2024, making it more challenging for buyers to borrow as much as they could just a few months ago.
While some experts believe that mortgage rates may decrease later in the year, there is no certainty. Rates could remain stagnant or, depending on economic conditions, even rise further. This uncertainty is making it difficult for prospective buyers to plan with confidence.
Tom Bill, head of UK residential research at Knight Frank, highlighted the unpredictable nature of mortgage rates. He pointed out that several factors could influence future rate changes, including the impact of the spring budget statement and ongoing inflationary pressures.
Bill explained that if the spring statement isn’t well-received by financial markets, mortgage rates may remain higher than expected. Additionally, stubbornly high inflation, driven in part by challenges in the labour market, could further delay any meaningful reduction in borrowing costs.
There are also external factors at play. Bill noted that potential trade tariff issues between the UK and the US could add to the uncertainty, potentially making it even more difficult for borrowers to secure favourable mortgage deals in the months ahead.
As a result, many buyers and sellers are facing a wait-and-see approach, carefully monitoring economic developments before making any major decisions. With both mortgage rates and house prices in flux, the housing market remains in a delicate balance.
This combination of rising mortgage costs and increased property listings underscores the challenges facing buyers, particularly those trying to stretch their budgets to secure their ideal home.
What’s happening across the country?
According to Zoopla, more buyers are out house hunting in southern England compared to this time last year. However, the increase in buyer demand has not kept pace with the growing supply of homes on the market.
This imbalance is contributing to sluggish house price growth in southern regions, including London, the South East, the South West, and the East of England. With more properties available, competition among buyers has eased, placing downward pressure on prices.
At a more local level, house prices have started to decline in certain areas. For instance, prices in Dartford have fallen by 0.8%, while Ipswich has seen a 0.2% drop, and north west London has recorded a 0.1% decrease.
London, in particular, faces additional challenges. It is the only part of the UK where buyer enquiries are currently lower than they were a year ago. The capital’s market may experience further setbacks, as eight in 10 first-time buyers will be required to pay stamp duty from April 2025, compared to fewer than half under the current thresholds.
Despite these concerns, some industry experts remain optimistic. Matt Thompson, head of sales at London estate agent Chestertons, anticipates a busy spring market. He notes that, although the recent surge in first-time buyers trying to beat the stamp duty deadline has slowed, many sellers are still listing their homes, increasing the options available to buyers.
Outside southern England, the market dynamics are more favourable for price growth due to better affordability. In northern England, the Midlands, and Scotland, buyer enquiries have risen by 10% year on year, while the supply of homes has grown at a slower pace.
This more balanced demand-supply dynamic is driving above-average house price growth in these regions. Over the past year, house prices have increased by 3% in the North West and 2.5% in Scotland.
At a local level, some towns and cities are seeing even stronger growth. In Scotland, Motherwell has experienced a 4.3% rise in house prices, while Kirkcaldy has seen a 3.8% increase. In northern England, prices are rising at more than twice the national average in areas such as Wigan, Blackburn, Lancaster, and Bradford.
In these areas, average house prices range from £130,000 to £220,000, which remains significantly below the national average of £267,500. This affordability continues to attract buyers, supporting further growth in property values.
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