The UK housing market is seeing an increase in sales, according to the latest data from Zoopla, with buyer confidence now growing.
There’s some good news for homebuyers and sellers alike – property website Zoopla reports that housing market activity is on the up. Increased supply, improved mortgage affordability, and stable pricing are all contributing to a boost in confidence.
May recorded the highest level of agreed home sales in four years, driven by a combination of improved affordability and more homes available on the market.
Compared to this time last year, there are now 13% more homes for sale, providing buyers with more options. Recent changes to how mortgage affordability is calculated mean that borrowers can now access more lending than earlier in the year, providing a welcome boost for those looking to move.
Change in affordability calculations
Several lenders have changed their affordability calculations, with NatWest announcing in late February a change for residential borrowers, potentially enabling the ‘typical mortgage customer’ to borrow more in certain circumstances. NatWest stated that this was in response to the Financial Conduct Authority’s recent call for lenders to design affordability rates that best meet customers’ needs in a market of declining interest rates.
Similarly, Precise Mortgages announced changes to its affordability calculations in March. This could mean that borrowing capacity could increase on average by around 9%, or possibly even more, depending on individual circumstances. Precise said that its new affordability calculation included reductions in assumed living expenses and costs for dependants, as well as updating income tax and NI contributions.
Increased housing market activity
Despite the increased housing market activity, house prices remain relatively stable. Zoopla reports that the average UK house price is £268,250 – just 1.6% higher than a year ago. On average, homes are currently selling at around 3%, or £16,000, below their asking price, a discount level that has remained steady in recent months.
Regionally, cities like Blackburn are experiencing the most substantial price growth, up 5.8%, while in southern England, a larger supply of homes is helping to keep price rises modest, at around 1%.
Whether you’re buying your first home or moving up the ladder, now could be a smart time to explore your mortgage options. We’re here to help if you need advice, and if you’d like to know how much you could borrow, try our online calculator.