Annual UK house price growth has slowed to 7.8%, bringing the average house price to £261,600. The last 3 months has been the slowest rate of quarterly price growth (0.7%) since February 2020 as fewer people look to move. At this stage, there have been no price falls in major cities or regions in the last three months.
But Zoopla experts expect this to change, and we’ll soon see quarterly growth of 0% and then house prices falling in 2023. “We still expect house price falls of up to 5% next year with 1 million sales and mortgage rates dipping below 5%,” says Richard Donnell, Director of Research and Insight at Zoopla. “But the number of sales going through will remain buoyant for a range of structural, demographic and economic factors.”
Price reductions have been the greatest in the south of England where the number of sales has also fallen the most. In the South East and East of England, almost 1 in 3 homes for sale have had their asking price reduced since the start of September.
Buyers are starting to get bigger discounts from sellers, with the average discount widening to 3% in recent weeks. Whereas sellers could expect to achieve 100%+ of their asking price in 2021 and 2022, the tide is turning in favour of buyers.
The outlook for the housing market in 2023 really depends on how willing and able sellers are to adjust their asking prices to what buyers are prepared to buy.
More affordable markets can also expect to weather the turn in the market better than areas in the south. Below-average house prices will continue to support home moves while more expensive markets will be more impacted by higher mortgage rates.
