House sales were 15% higher in recent weeks than the same period a year ago as mortgage rates started to fall, a new survey has suggested.
Zoopla found that agreed sales jumped as demand from buyers was up by 11% and the number of homes for sale 21% higher than a year ago.
The survey, which covers the four weeks to February 18, found that house prices only dropped 0.5% compared to a year earlier.
The reduction has mellowed since October when prices dropped 1.4% on average across the UK.
“The housing market has proved very resilient to higher mortgage rates and cost of living pressures,” said Zoopla executive director Richard Donnell.
“More sales and more sellers shows growing confidence amongst households and evidence that 4-5% mortgage rates are not a barrier to improving market conditions.
“The momentum in new sales being agreed has been building for the last five months and the sales market is on track for 1.1m sales over 2024 supported by new sellers coming to the market.
“While sales are set to increase we don’t expect house price growth to accelerate further in 2024.”
Zoopla said that the 1.1 million homes it expects to sell this year are approximately 10% more than in 2023.
But while mortgage rates are falling in anticipation of the Bank of England cutting its base interest rate later this year, borrowers should still expect 4% to 5% rates over much of the year, Zoopla said.
It said that areas in southern England, outside of London, have seen the largest annual price falls in the country. The average home now costs £344,000 in the area, which is 30% above the UK average.
Meanwhile in London average prices are £534,000. But in the capital affordability has been improving slowly over the last seven years, Zoopla said.
Across the rest of the UK house price growth has slowed a lot over the last year, but in areas where house prices are at or below average, prices have not generally been falling.
In these areas “the impact on buying power from higher mortgage rates has been less pronounced”, Zoopla said.