Prices falling in most local housing markets in UK, Zoopla finds
All local markets in London, South and East England registered annual house price falls.
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Your support makes all the difference.House prices have fallen in every local property market in South and East England this year, as higher mortgage rates have weakened demand for new homes, figures have shown.
About 80% of all markets in the UK have registered house price falls over 2023 compared with last year, property portal Zoopla found.
This has been the case for all markets in London, South and East England, and more than half for the rest of England and Wales. Just less than two fifths of markets in Scotland registered price falls.
Rising borrowing costs and a squeeze on household incomes has meant some people are delaying moving or are unable to afford to take out a loan.
Modest house price falls over 2023 mean it’s going to take longer for housing affordability to reset to a level where more people start to move home again
Weaker demand has resulted in a slowdown in house price growth from a 9.2% increase a year ago, to a 1.1% decline this year, according to Zoopla’s house price index.
This marked the sharpest year-on-year fall in price growth since 2009, it said.
Nevertheless, the scale of price falls has been “modest”, remaining below 5% in all markets, the analysis showed.
The number of UK house sales has been hit harder, with transactions on track to have fallen by nearly a quarter this year compared with last, to one million.
It comes as the proportion of cash buyers – people who have the money immediately available to purchase a property, and do not need to take out a mortgage – has swelled this year.
Zoopla said cash buyers have accounted for about a third of all housing sales this year, up from a fifth over the last five years.
There have been about 60,000 more properties bought with cash this year than throughout 2022, it estimated.
First-time buyers are set to be the largest buyer group in 2023. While their share of total sales has fallen in recent years, a sharp increase in rents has fuelled demand, Zoopla said.
We believe that house prices will post further small falls, averaging 2% over 2024 with one million home moves
Richard Donnell, executive director at Zoopla, said: “House prices have proven more resilient than many expected over the last year in response to higher mortgage rates.
“However, almost a quarter fewer people will move home due to greater uncertainty and less buying power.
“Modest house price falls over 2023 mean it’s going to take longer for housing affordability to reset to a level where more people start to move home again.
“Income growth is finally increasing faster than inflation but mortgage rates remain stuck around 5% or higher.
“We believe that house prices will post further small falls, averaging 2% over 2024 with one million home moves.”