Surge in UK houses for sale will hold back prices, experts say

About a third of homes for sale were also on the market in 2023 but failed to find a buyer

A woman looks at advertisements in an estate agent's window near Faversham, England. PA

The number of homes for sale in Britain is at its highest in eight years, which experts say will limit price rises for the rest of 2024.

Latest research from Zoopla shows the average estate agent has 31 homes for sale, up 20 per cent on the same point last year and the highest since 2016.

About £230 billion ($292 billion) worth of homes are on offer, as sellers continue returning to the property market in growing numbers.

Many existing homeowners delayed moving decisions in the second half of last year, Zoopla said, as the effect of higher borrowing costs on house prices and buyer demand knocked confidence.

Just below one third of homes for sale were also listed for sale in 2023 but failed to find a buyer.

But an expected fall in mortgage rates this year, combined with rising sales volumes over the past six months, has boosted sentiment.

Experts think the Bank of England is likely to cut interest rates in the coming months, after headline inflation eased to 2.3 per cent in the 12 months to April 2024, down from 3.2 per cent in the 12 months to March.

The number of house sales agreed also rose by 13 per cent since this point last year, but stayed behind the level of supply – giving buyers the pick of the market.

The trend is expected to keep house price inflation in check. Zoopla’s latest index found yearly property price inflation is minus 0.1 per cent, meaning prices have fallen slightly over the last 12 months.

There has been an increase in house price inflation over the past quarter, at 0.4 per cent up, in response to more sales and firmer pricing, but this quarterly growth rate has slowed over the last month.

The property website said it expects inflation to be flat for the year.

“The growth in the supply of homes for sale is evidence of renewed confidence amongst homeowners, some of whom delayed moving decisions in 2023," said Richard Donnell, executive director at Zoopla.

“The quarterly rate of house price inflation has picked up in recent months as more sales are agreed and prices firm.

“The announcement of the election will slow the pace at which new sales are agreed while greater choice for buyers will keep house prices in check over 2024.

“It’s essential that those serious about moving in 2024 price their homes realistically if they want to achieve a sale.”