Agents impatient with mortgage lenders despite better news on sales

The estate agents’ trade body has made the unexpected move of calling on banks to cut mortgage rates.

Rates are typically decided by market forces rather than lobbying, but Propertymark is calling on banks “to develop more affordable mortgage products to help ease borrowing costs and inspire consumer confidence.” 

It says inflation is now steadying and Bank of England base rate cuts are “close on the horizon” so it is critical of the many mortgage lenders who in recent days have increased rates for borrowers, in response to movement on the swap market.

Propertymark’s lobbying comes despite evidence that sales improved last month.

Ultimately this is expected to boost the number of home sales by 10 per cent this year, new figures from Zoopla show.

All the portal’s measures of activity were higher than in February 202 with agreed sales up by 15 per cent and buyer demand up 11 per cent.

And transactions across the year will be 1.1m in 2024, up from 1m in 2023.

The latest Zoopla House Price Index shows that the number of homes for sale are a fifth higher than a year ago. The North East (up 17 per cent) and London (up 16 per cent) have led the rebound in sales.

Slowing house price falls have been recorded across all regions of the UK although annual price drops in Five English regions are still as bad as 2.1 per cent.

Zoopla says firmer pricing of homes is evidence that house prices do not need to fall to support sales: in addition, estate agents are agreeing an average of six new sales a month, versus 5.2 this time last year.

Richard Donnell, executive director at Zoopla, said: “The housing market has proved very resilient to higher mortgage rates and cost of living pressures. More sales and more sellers shows growing confidence amongst households and evidence that four to five per cent 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. ”