Sales and demand for real estate in the UK are up significantly from a year ago, according to a survey.

As confidence improved, real estate demand and sales in the UK increased by over 5% in the last few weeks of 2023 compared to the same period the previous year, according a poll.

According to the real estate website Zoopla, December saw 17% more new sales than the same month the previous year, when the market was more active due to rising mortgage rates. The number of potential buyers contacting agents to schedule viewings and inquire about a particular property featured on Zoopla indicates a 19% increase in demand. It stated that more houses for sale are boosting choice and bolstering sales.

This month, Zoopla reported a 1.1% yearly decline in property prices nationwide, with a 1.5% decline in London and an average price of £536,800. Prices in the City of the Capital increased by 0.3%, while the largest price decreases were recorded in Croydon, Bromley, and Woking, where they decreased by 3.5%, 3.4%, and 2.8%, respectively.

A third of all sales were to cash buyers, while a third fewer properties were sold with a mortgage due to rising interest rates. The Bank of England has maintained its base rate at 5.25% since August, when it increased it gradually to combat persistently rising inflation.

With inflation falling to 3.9% last month, below expectations, there is optimism for more rate decreases in 2019. According to Moneyfacts, mortgage rates have already decreased, averaging 5.95% for a two-year fix and 5.55% for a five-year fix.

Executive director of Zoopla Richard Donnell stated: “We haven’t been surprised by the housing market’s resilience over 2023, but it has surprised many.” The minor fall in house prices over the year can be attributed to the introduction of mortgage controls in 2015. These regulations have prevented an overvaluation of housing.

While prices in Scotland and Northern Ireland have somewhat increased throughout the year, the decline in house prices has been focused in the south and Midlands. Since housing in the UK still seems pricey by historical standards, we anticipate that as wages and prices adjust, UK house prices will drop by an additional 2% by 2024.

According to Zoopla, there will be one million real estate transactions in 2019; of them, first-time purchasers will make up two-fifths.

According to Nathan Emerson, the CEO of Propertymark, a professional association for real estate brokers, there is no doubting that the previous year has seen significant volatility in the housing market, primarily due to elevated inflation and the ensuing increase in interest rates. We hope that the overall economy has reached a turning point, and it is encouraging to see sales volumes picking up steam again in comparison to this time last year.

We have to be on guard in the upcoming months. But if inflation keeps declining, we should start to see a drop in interest rates as well, and this is when the UK housing market really picks up speed again.

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