Housing market sees busiest May in four years as buyers ignore stamp duty rise
The property market has seen its busiest May in four years, according to analysis from Zoopla.
It said there has been a surge in sales this month as buyers returned to the market despite the end of stamp duty reliefs.
The number of sales agreed in May is running at its fastest rate in four years since the pandemic boom of 2021, according to the property portal.
This is likely in part due to an increased number of properties for sale, with 13 per cent more homes on the market than a year ago.
Mortgage rates have also been falling since April while a number of lenders have changed their mortgage affordability rules allowing customers to borrow more than they could previously.
Zoopla estimates that borrowers can afford to borrow 20 per cent more than earlier this year, which is supporting the growth in sales.
Richard Donnell, executive director at Zoopla said: 'More homes for sale means more buyers looking to move home.
'This, coupled with more attractive mortgage deals and changes to how lenders assess affordability, is supporting an increase in the number of sales being agreed.'
However, while more sales are happening, prices are largely static compared to last year and sellers are typically accepting offers under asking price.
House prices are up 1.6 per cent over the past year on average when looking at the UK as a whole, according to Zoopla.
It says homes are also currently selling for an average of £16,000 below asking price.
However, Zoopla also reiterated the housing market is behaving very differently in the North compared to the South.
The increased number of homes for sale in southern England is significantly boosting buyer choice and, in turn, keeping price growth in check.
There are 21 per cent more homes for sale in the South West compared to this time last year, with 17 per cent more in London and 15 per cent more in the South East, resulting in slower growth.
This, along with affordability constraints, explains why house price growth is less than 1 per cent across all regions of southern England, from 0.5 per cent in the South East to 0.9 per cent in the South West.
In contrast, there are just 3 per cent more homes for sale in the North West and 5 per cent more in Scotland than a year ago.
Lower availability of homes for sale, better affordability and faster growth in sales explain why house prices are 3 per cent higher across the North West and 2.9 per cent higher in Scotland, with above-average price rises recorded across northern England and Northern Ireland.
'There are more sales and stronger house price increases in northern regions of England and Scotland, where homes are more affordable,' added Donnell.
'In southern regions of England, affordability continues to weigh on price inflation and the number of sales being agreed.
'Sellers and buyers need to adopt different tactics based on where they live across the UK; however, all sellers need to keep their feet on the ground and be realistic on pricing expectations.
'We expect sales to keep rising over the second half of the year, with UK home values on track to be 2 per cent higher by the end of the year.'
Southern glut: There are 21 per cent more homes for sale in the South West compared to this time last year, with 17 per cent more in London and 15 per cent more in the South East
Zoopla's analysis chimes with exclusive data shared with This is Money last week by the estate agent Hamptons.
Its analysis of Land Registry data showed that some property hotspots in the Midlands and the North have recorded double-digit house price growth in the last year, far outpacing their southern counterparts.
The local area that saw the biggest price spike was Blackburn with Darwen in Lancashire.
The average home there has risen by a whopping 14.4 per cent year-on-year, going from £138,290 in 2024 to £158,170 at the start of this year, representing a £20,000 increase.
Interestingly, Zoopla also revealed Blackburn to be its fastest moving house price hotspot, albeit at a more modest 5.8 per cent year-on-year.
Martin Bennett, owner of Crown Estates and Lettings Agents in Blackburn, said: 'Business is booming in Blackburn, with increased demand for properties both at the lower and top end of the market.
'This is being reflected in house prices, with an entry-level property in Blackburn having an average asking price of approximately £75,000 compared to approximately £50,000 two years ago.
'From my experience, properties that are priced correctly are going under offer within two weeks of being listed, while it's not uncommon to have 10 plus potential buyers on the first day of viewings.'
Best mortgage rates and how to find them
Mortgage rates have risen substantially over recent years, meaning that those remortgaging or buying a home face higher costs.
That makes it even more important to search out the best possible rate for you and get good mortgage advice, whether you are a first-time buyer, home owner or buy-to-let landlord.
> Mortgage rates calculator
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To help our readers find the best mortgage, This is Money has partnered with the UK's leading fee-free broker L&C.
This is Money and L&C's mortgage calculator can let you compare deals to see which ones suit your home's value and level of deposit.
You can compare fixed rate lengths, from two-year fixes, to five-year fixes and ten-year fixes.
If you're ready to find your next mortgage, why not use This is Money and L&C's online Mortgage Finder. It will search 1,000's of deals from more than 90 different lenders to discover the best deal for you.
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