UK property outlook: A more evenly balanced market
One in 10 homes on the market has reduced its price by 5%, reports Zoopla, the property website, following two and half years of boom and record-high increases.
As the market cools, the trend has been for sellers to accept discounted prices to complete a house sale. Rightmove, another property website, announced the largest pre-Christmas dip over the last four years, citing an average 2.1% drop. That puts the average asking price for a UK home at just over £359,000 in early December, some £7,850 less than in November. This is a percentage fall similar to that quoted by building society Halifax in November of 2.3%. Others report up to a 3% drop.
Taken in context, however, the average asking prices at the end 2022 are still over 5.5% higher than this time last year. Rightmove also reports an 11% increase in the number of homes for sale on its website compared with last December, predicting a more even balance between supply and demand next year.
With greater choice returning to the housing market, properties will take longer to find the right buyer.
However, analysts do not think there will be an over-supply of properties for sale, which would contribute to larger price falls in 2023. Rightmove forecasts a 2% drop in house prices next year.
Predictions for 2023
The lack of housing stock will remain an ongoing market factor, despite the total stock of homes available being up by 40% compared with 2021. A further rise in mortgage rates, widely expected to reach 5% at the start of the New Year, will also play its part.
Zoopla highlights that some of the hottest property markets are experiencing the biggest drop in sales volumes. This is likely to continue into the New Year. High-value areas, where mortgage rates are impacting on buying power, have seen some of the largest falls in transactions, by up to 50%. These areas include Southern England, excluding London, East Midlands and Wales. More affordable locations and London, where the market was weaker, will be less affected.
More property news in the New Year.