House price inflation in the UK is showing the slowest rate of growth since November 2021, reducing to just 7.8% after the October mini budget.
As it stands today, since September 2022 one in every 10 properties has seen its price reduced by 5%. This news comes after several months of record-breaking price increases, which suggests that the market is re-balancing itself.
The Zoopla house price calculator can offer more specific insight into the state of property prices in your area.
Are sales affected?
Demand for property since October 2022 has fallen by 44%. This is certainly impacting sales, with figures sitting 28% below where they were at the same time in 2021.
These changeable circumstances are particularly impacting property buyers who require mortgage financing, however property sales involving parties with low-rate mortgages are still progressing smoothly.
The picture also shows that sales involving particular types of buyers are progressing, particularly first time buyers who would otherwise be forced to contend with high rental price increases.
Which markets are impacted?
Notably, markets that have been particularly busy in recent months are seeing the most significant reduction in sales. New sales have reduced by as much as 50% in a range of areas, including Southern England, Wales and the East Midlands.
Areas with more affordable property prices aren’t being impacted quite as much and the weakened market in London has seemingly sheltered it from the most significant reductions.
What is the picture for 2023?
Experts predict that mortgage rates will remain at 5% at the beginning of 2023, however buyers could benefit from the trend towards sellers accepting below-asking price offers in order to successfully complete the sale.
Currently, the average price secured by sellers is as much as 3% below the original asking price and property experts are stressing that prices typically start to reduce when this figure hits 5%.
Most are not currently expecting house prices in the UK to fall by multiple digits, but while the house price outlook is weak, the market is likely to be buoyed by needs-based moves and the increasingly flexible labour market with more businesses offering work from home arrangements.
First-time buyers are also likely to be more eager to step onto the property ladder as high rents and the increasing cost of living stretch incomes ever further. With property prices becoming more enticing, it remains essential for all buyers to commit to the proper checks and surveys to ensure they are investing in the right property. For buyers looking for a building survey Birmingham and beyond, working with quality legal representatives such as the team at Sam Conveyancing will ensure the process proceeds smoothly.
Another piece of good news is that new housing volumes are on the rise. Although they are still around 20% lower than during pre-pandemic times, this increasing supply of properties will provide buyers with more choice.
Property experts are already noting that properties are already being repriced, with sellers eager to ensure they secure a sale in a timely manner within what is proving to be an increasingly competitive market. The most significant reductions have been recorded in the East and the South East of England where almost a third of sellers have reduced their asking price in a bid to attract more interest from buyers.
