The average house price in the UK was £263,600 as of January 2024, according to findings from Zoopla’s latest House Price Index.
Zoopla’s research revealed that house prices fell 0.5% in the last year, compared to 1.4% in October 2023.
This puts the current average house price 1.5% below the peak of £268,000 in October 2022.
In addition, the average estate agent is currently agreeing six sales each month, compared to 5.2 a year ago.
Five regions in the south of England saw house prices fall, led by the East of England (-2.1%).
However, house prices are rising again in the remaining four regions of England, as well as in Wales (+0.3%), Scotland (+2.2%) and Northern Ireland (+4.3%).
Scotland was the only region which has remained in positive growth over the last year.
Richard Donnell, executive director, research at Zoopla, said: “Mortgage rates falling back to where they were a year ago has been instrumental in improving housing market sentiment and activity in recent weeks.
“Faster earnings growth and rising incomes are also starting to offset higher borrowing costs, albeit slowly.
“I expect mortgage rates to stay between 4% and 5% for much of 2024.
“Lenders have been taking any deals below 4% off the market most recently, due to a modestly increased cost of finance for them.
“This signals that house price rises will remain between 0% and low single-digit rises.
“My consistently-held view is that 5% mortgage rates are the tipping point to create annual house price falls, while rates over 6% for a sustained period would lead to double-digit falls.
Donnell added: “There’s clear demand from homeowners and first-time buyers looking to move or buy their first home in 2024.
“This will support higher sales volumes but I don’t expect house price growth to be any greater than it is now.
“The housing market is still adjusting to higher mortgage rates and reduced buying power, the impact of which has varied across the country.
“If you’re planning to sell your home this year, remain realistic on pricing and celebrate the fact that your home is likely to attract more buyer interest now than last year. This increases the likelihood of a successful sale.
“If you’re planning to buy a home, expect mortgage rates to remain within the 4% to 5% range.
“They could move a little lower over the year, but this hinges on the Bank Rate and if (and when) it’s cut later in the year.
“Momentum in the sales market has been building over the last five months. I believe the housing market is on track for 10% more sales in 2024 than in 2023, totalling 1.1 million, as greater supply boosts the potential for more sales.
