A new Housing Market Snapshot from Zoopla suggests that the supply of housing in the market has triggered a slowdown in house price growth after a period of remarkable increases.
The portal says the increase in the number of homes for sale at the start of this year was actually 5% over the five-year average for new listings, which slowed the growth in home prices to 7.8. % – slightly below the 8.0% of a month ago.
However, Zoopla insists the market is very localized with performance ranging from the biggest increase in the UK – a 16.6% annual increase in Powys in Wales – to price cuts, with a 2.2% decline observed in the City of London.
But demand is still aggressive and although Zoopla admits new listings have increased for every type of property in the first two months of the year compared to 2021 – and in particular for single-family three- and four-bedroom homes – as many as half of all homes listed for sale are snapping up within three weeks of going on the market.
This contrasts with a third of properties that found buyers so quickly at the same time last year.
The port says the average UK house price is now £244,100, an increase of around £80,000 over the past decade.
Grainne Gilmore, Head of Research at Zoopla, comments: “The level of activity in the market in recent years has eroded the stock of homes for sale.
“But the data indicates that more homes are now coming to market as movers and other owners put their properties up for sale – and this will create more choice for the many active buyers in the market. However, the imbalance between strong demand and supply will take much longer to resolve, and this imbalance will continue to support prices in the year ahead.”
The portal says that last year around 1.5 million home sales were secured, even as inventory levels fell as willing sellers and buyers were able to agree purchases.
The market moves more easily when buyers have a choice. Zoopla therefore believes that rebuilding the pipelines is positive, as movers are more willing to list homes when they can find a property to move to.
However, a shift in sentiment in the market due to changing economic conditions would cause listings to slow further as potential movers, sellers, take a “wait and see” approach. But faced with such demand, including from first-time buyers who do not need to sell, there will always be the possibility of securing transactions.
The portal’s Market Snapshot concludes: “This year, rising economic headwinds, including rising costs of living and rising mortgage rates, will begin to dampen house price growth. The global uncertainty and volatility resulting from the invasion of Ukraine will have economic repercussions around the world, including the UK. We continue to expect 1.2 million home sales this year, up from 1.5 million in 2021, and average home price growth of 3.5% at the end of the year. »