Homeowners across the UK are currently accepting offers around £16,000 below their original asking prices in an effort to secure a sale in what remains a buyer-friendly market.
According to analysis from Zoopla, the housing market has seen its busiest May since the post-pandemic property surge of 2021. This recent uptick in activity is being driven by improved mortgage affordability and a noticeable rise in the number of homes for sale. The typical asking price now stands at £367,000.
Even though buyer interest is picking up, sellers are having to adjust their expectations. On average, homes are being sold at a 4.5% discount compared to their listed prices — reflecting a shift in negotiating power towards buyers.
A key factor behind the renewed demand is the way lenders are now assessing mortgage affordability. Buyers can currently borrow up to 20% more than they could at the start of the year. This increased borrowing capacity has helped offset the challenges posed by last year’s spike in interest rates.
Back in 2022 and 2023, higher rates — briefly reaching 6% — had a dampening effect on housing transactions. However, recent improvements in mortgage deals have made a noticeable difference.
Sarah Coles, writing for Yahoo Finance UK and head of personal finance at Hargreaves Lansdown, highlighted this trend by pointing out that many mortgage products are now priced below 4%, opening up opportunities for a broader range of potential buyers.
Despite the rise in buyer interest, house price growth remains modest. The average property value has gone up by 1.6% over the past year, reaching £268,250. That’s an increase of roughly £4,330.
Nevertheless, while demand is on the rise, the pace of price growth remains limited. This is likely due to the ongoing pressure on household budgets, as inflation continues to weigh on consumer finances.
The strongest house price growth is currently being recorded in the North West of England, where increasing employment opportunities and more affordable housing are pushing up prices. Leading the pack is Blackburn, with a yearly rise of 5.8%, followed by Wigan at 4.4%, Birkenhead at 4.1%, and Liverpool at 3%. Manchester has also seen an uplift, with prices up by 2.5%.
Martin Bennett, who owns Crown Estates and Letting Agents in Blackburn, reported strong activity across the local market. He noted that demand is high for both lower-priced and premium homes. Entry-level properties in the town are now averaging around £75,000 — a significant rise from roughly £50,000 two years ago.
Bennett also highlighted how quickly homes are selling when priced appropriately. In many cases, properties are going under offer within just two weeks of being listed. It’s also not unusual for ten or more prospective buyers to attend viewings on the very first day.
Meanwhile, Scotland is showing solid performance too, with average prices increasing by 2.9% over the past year. However, Aberdeen stands apart from this trend, with prices falling by 1.4% due to ongoing economic uncertainty linked to the oil and gas industry.
In contrast, the southern parts of England are experiencing more restrained price growth. A rise in housing supply across the South West, London, and the South East is giving buyers more choice. These areas have seen year-on-year increases in homes for sale of 21%, 17%, and 15% respectively.
Price growth across the southern regions remains relatively flat, with increases staying under 1%. This is largely due to affordability issues, which continue to put a cap on further price rises.
Zoopla’s latest House Price Index shows that the number of agreed sales during May has reached its highest point in four years. This surge in transactions is being supported by a 13% annual rise in the number of homes coming onto the market.
Richard Donnell, executive director at Zoopla, explained that an increase in the number of homes for sale is encouraging more buyers to consider moving. He added that this trend, combined with more appealing mortgage deals and changes in how lenders assess affordability, is driving a rise in the number of sales being agreed.
Donnell also emphasised that buyers and sellers need to adjust their strategies depending on their location within the UK. Despite regional differences, he stressed that all sellers should remain realistic about their pricing expectations.
Looking ahead, Zoopla predicts that sales will continue to gain momentum throughout the second half of 2025. They expect national house prices to finish the year around 2% higher than where they started.
Download NOW
4 Simple Steps To Becoming Wealthy Through Property