February sales boom, but prices fall

The market quickened up in February, as more sellers accepted some lower offers on their properties.

Zoopla research says buyer demand rose by 11%, while the number of sales rose by 15% from the year earlier.

However house prices saw a reduction of 0.5% year-on-year, with seven regions experiencing price rises and five seeing falls.

Sarah Coles, head of personal finance, Hargreaves Lansdown, said: “February sustained the new life we saw breathed into the market at the start of the year, with some buyers and sellers returning to the market, and sales picking up again.

“However, while this is much-needed good news for sellers, it’s worth highlighting that prices are dropping, asking prices are being cut, and the market faces some serious hurdles.

“Falling mortgage rates at the end of 2023 and beginning of 2024 made the key difference in boosting market optimism, and rates are starting to rise again. They’re still only roughly where they were a year ago – and the average two-year rate is still under 5.75% – but a rise may persuade some buyers to press pause.”

She added: “The picture varies a great deal across the country. Unfortunately for many, it’s still grim down south.

“In the south, excluding London, we’re seeing the impact of relentless eye-watering price rises over the past few years. As a result, affordability is a major problem, and we’re still seeing asking prices drop significantly.

“London is an exception, because prices didn’t rise as far or as fast as elsewhere in the south, so incomes have caught up a bit. It’s one of the strongest areas for sales right now.

“The rest of the country has seen prices rise over the past few years, just not quite so steeply or as high, so falls have been more limited.”