Prices falling in most local housing markets in UK, Zoopla finds

Home costs have fallen in each native property market in South and East England this 12 months, as larger mortgage charges have weakened demand for brand new houses, figures have proven.

About 80% of all markets within the UK have registered home worth falls over 2023 in contrast with final 12 months, property portal Zoopla discovered.

This has been the case for all markets in London, South and East England, and greater than half for the remainder of England and Wales. Simply lower than two fifths of markets in Scotland registered worth falls.

Rising borrowing prices and a squeeze on family incomes has meant some persons are delaying shifting or are unable to afford to take out a mortgage.

Weaker demand has resulted in a slowdown in home worth progress from a 9.2% enhance a 12 months in the past, to a 1.1% decline this 12 months, in line with Zoopla’s home worth index.

This marked the sharpest year-on-year fall in worth progress since 2009, it mentioned.

Nonetheless, the size of worth falls has been “modest”, remaining under 5% in all markets, the evaluation confirmed.

The variety of UK home gross sales has been hit tougher, with transactions on observe to have fallen by practically 1 / 4 this 12 months in contrast with final, to at least one million.

It comes because the proportion of money consumers – individuals who have the cash instantly obtainable to buy a property, and don’t have to take out a mortgage – has swelled this 12 months.

Zoopla mentioned money consumers have accounted for a couple of third of all housing gross sales this 12 months, up from a fifth during the last 5 years.

There have been about 60,000 extra properties purchased with money this 12 months than all through 2022, it estimated.

First-time consumers are set to be the most important purchaser group in 2023. Whereas their share of whole gross sales has fallen lately, a pointy enhance in rents has fuelled demand, Zoopla mentioned.

Richard Donnell, govt director at Zoopla, mentioned: “Home costs have confirmed extra resilient than many anticipated during the last 12 months in response to larger mortgage charges.

“Nevertheless, nearly 1 / 4 fewer individuals will transfer house attributable to larger uncertainty and fewer shopping for energy.

“Modest home worth falls over 2023 imply it’s going to take longer for housing affordability to reset to a degree the place extra individuals begin to transfer house once more.

“Revenue progress is lastly growing quicker than inflation however mortgage charges stay caught round 5% or larger.

“We imagine that home costs will submit additional small falls, averaging 2% over 2024 with a million house strikes.”