The long-predicted slowdown in the UK property market is already starting to take effect, the Financial Times reports. According to the latest figures from Zoopla, sellers are being forced to reduce their asking prices for the first time in 18 months, at least in some areas of the country.
The publication also notes that the South West of England and Wales, both areas which experienced a spike in demand during the pandemic, are experiencing the greatest volumes of discounted house prices.
Until recently, Wales has shown the strongest regional growth in the UK, jumping by 22% from May 2020 to March 2022. The overall UK average house price growth for the same period was 18%. Overall, leading property portal Rightmove predicts that growth will slow dramatically during the next 12 months, to just 3%.
Dominic Agace, chief executive of London-focused estate agent Winkworth told the Financial Times: “The exodus of people leaving cities has slowed and perhaps even gone into reverse. People who rushed away for space are now happier being close to work.”
Agace also noted that two-fifths of the people going to Winkworth’s Notting Hill office to look for rental properties were returning to London after an initial decision to take up a new lifestyle in the countryside.
London is still holding up well, as people are returning to offices in greater numbers than was originally predicted. There is a particular demand for flats, with flats in the capital selling in an average of just 29 days between March and April, down three days on the previous month’s figures.
Three-bedroom homes outside of London remain the most sought-after properties, although demand has tailed off slightly, with an average sale agreed time of 18 days in March, compared to 18 days in April. inside the capital, the average time has widened from 17 days in March, to 21 days in April.
Sellers who want to take advantage of the price boom are advised to act quickly, before the mounting pressures of higher mortgage rates, squeezed incomes, and economic uncertainty kick in for earnest.
Vincent Dennington, director at estate agent John D Wood & Co, said: “We are starting to see more and more price reductions on property portals, which is perhaps an early indication that the market is slowing down.”
He added: “However, this may also be a sign that properties have been initially overpriced and are not achieving any interest from potential buyers; therefore needing to be adjusted correctly to ensure a reduction generates new interest and ultimately offers.”
Meanwhile, Time Out reports that just one city in the UK has experienced a drop in house prices in the UK over the past year. This is the city of Aberdeen, on the east coast of Scotland, which saw the average house value fall by 1.7%. However, this may have been caused by overpricing by sellers, rather than a fall in demand for residential property.
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