"More homes are now coming to the market, as movers and other owners list their properties for sale - and this will create more choice for the many buyers active in the market."
Despite total stock levels remaining down on the medium term average, Zoopla says this rise in new supply signals a "possible return to pre-pandemic stability" for the rest of 2022.
New listings have risen for every property type in the first two months of the year compared to 2021. But the latest data for January and February now also shows a rise in the supply of larger three and four-bed detached family homes coming on to the market, compared to the same period last year.
Additionally, new supply is up on pre-pandemic levels for this time of year in four regions - Scotland, East Midlands, North East and Yorkshire - and is matching pre-pandemic levels in the North West and West Midlands.
However, continued near-record demand for housing has seen the busiest start to the year since 2016, with sales agreed in 2022 to date matching levels seen at the start of 2021. In practice, this means that in January, half of all homes where sales were agreed were snapped up within three weeks of coming to market, compared to a third of properties during the same period last year.
As demand continues to outpace supply, the average house price now stands at £244,100 - a rise of 7.8% in the year to the end of January.
But there are also early signs that the rate of average house price growth is beginning to ease, with the quarterly rise in the three months to January at its lowest level since August 2020. However, the average value of flats across the UK is up 2.6% on the year - the highest level since August 2017.
There are also regional differences as Wales in particular continues to see a steep upward price growth trajectory. Here, average values are up 11.7% on the year, with price growth ranging from 16.6% in Powys to 8.7% in Flintshire. In addition, houses in the South West of England continue to creep up with an average rise of 9.7%.
Conversely, London tells a different story with average prices up at a more modest 3.1% - rising most prominently in the borough of Bromley at 6.9% where there is greater headroom for growth, while house prices in the City of London have fallen by 2.2%.
Grainne Gilmore, head of research at Zoopla, commented: “The sheer level of activity in the market in recent years eroded the stock of homes for sale. But the data indicates that more homes are now coming to the market, as movers and other owners list their properties for sale - and this will create more choice for the many buyers active in the market. However the imbalance between high demand and supply will take much longer to unwind, and this imbalance will continue to underpin pricing in the coming year.
"Even so, we expect the rate of annual house price growth to ease over the course of 2022, as economic headwinds, including mortgage rate rises and the rising cost of living, put the brakes on price rises. Overall, we forecast average price growth of +3.5% by the end of the year across the UK."
