Your monthly UK housing market update – including sold and asking prices, RICS surveyor sentiment and predictions for the year ahead.
HM Land Registry – Sold Prices
As reported in the latest UK House Price Index, prices rose by 12.6% in the year to October 2022. This was up from the 9.9% seen in September.
Growth was strongest in the North East, with prices rising by a massive 17.3%. As usual, London saw the lowest growth at just 6.7%.
On a non-seasonally adjusted basis, prices increased by 0.3% between September and October 2022. This compares with a decrease of 2.1% the year earlier, which was likely caused by the drive to complete purchases before the Stamp Duty Land Tax changes at the end of September.
As prices steadily rose throughout the year, the average UK sold price reached £296,000. This represents a significant rise of +£33,000 from the same time last year. The number of transactions was also significantly up for the month (at 108,580), an increase of 38% on October 2021.
Despite these increases, homebuyers and mortgage lenders are becoming more and more cautious due to concerns about living costs. Indeed, mortgage approvals fell from 66,000 in September to 59,000 in October 2022.
Rightmove – Asking Prices
Over December 2022, average asking prices dropped by 2.1% (-£7,862). This brought average asking prices to £359,137, a bigger dip than normal at this time of year.
With the uncertain economic headwinds, many buyers have paused their plans for the foreseeable future. Consequently, vendors determined for a quick sale are having to adapt their price expectations.
Despite this, the last two weeks of December saw a slight increase in people enquiring to estate agents’ branches – a good sign for the new year. The number of Rightmove views of homes for sale is also up by 11% on last year.
Rightmove predict a 2% drop in average asking prices over 2023. They also forecast a slower, calmer market, as buyers wait for the right home and sellers hold out for prices matching their expectations. As a result, homes will take longer to sell. We could see a return to the more normal time of 60 days to find a buyer.
RICS – Chartered Surveyor Sentiment Survey
The latest RICS UK Residential Survey shows overall market activity weakening over November 2022. Across the board, higher interest rates and tricky macroeconomic outlooks are impacting buyer sentiment. This metric was -38% for November, the seventh consecutive negative monthly reading.
As a result, house prices are continuing to fall, a trend set to continue over the next few months at least. Agreed sales were also still in negative territory, at -35% for the month. This was slightly less negative than October (-45%) but shows continued contractions in sales volumes.
When it comes to house prices, -25% of respondents saw a fall over the month. This was the weakest figure for price growth since May 2020. -61% of contributors further foresee declines in house prices over the coming twelve months – down from an already weak -48% in October.
Zoopla – Housing Market Outlook
In their December market report, Zoopla note that affordability and value for money are key to the 2023 outlook. As mortgage rates and household incomes are increasingly squeezed, unaffordable markets are likely to see a drop in demand.
Zoopla also report the flight to rural and coastal areas (kickstarted during the pandemic) has now moved into reverse. This means flats and urban areas are expected to fare better in 2023. More affordable urban areas, such as Bradford, Swindon, Coventry and Milton Keynes are already registering above-average demand.
Zoopla predict quarterly price falls over the first half of 2023 across all regions of the UK. These falls are likely to be largest in London, with price drops of 5% to 8% predicted over 2023.
Express Index
For a full, comprehensive breakdown of current property market activity. Visit our Express Index here
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