Housing market behaviour is set to return to pre-Covid norms, Zoopla’s latest House Price Index suggests.
Fears of a market crash and double-digit price falls are unwarranted, said the property portal. There is no sign of any significant drop off in buyer interest in response to higher mortgage rates and cost of living pressures.
Zoopla concedes that Demand for homes has slowed over 2022 but said it remains 25 per cent higher than the average seen over the last five years, and is ‘on a par with this time last year’.
The average home is now worth £256,600, up £19,700 the year, said Zoopla. ‘A stronger than expected desire for households to move means that overall, housing sales are expected to reach 1.3m – 100,000 more than was originally forecast at the beginning of the year. This also means the pace of house price growth is slowing less quickly than expected and by the end of the year, prices are expected to have risen 5 per cent, meaning the average value of a home will reach nearly £260,000 by December’.
Nearly two and a half years on from the Covid pandemic, ripples are still being felt with rapid growth in working from home supporting a continued desire to move home.
‘The housing market is not immune from higher mortgage rates which we are starting to see increase quickly’, warned Zoopla director of research Richard Donnell. ‘Buyer interest is expected to slow over the coming months as people tighten their belts and spend with more caution which will see price growth weaken further.
‘Whilst we don’t expect current trends to lead to a marked drop in house prices next year, buyers will become more wary and it is important sellers are realistic when pricing their homes to sell’.
Postal areas in the UK with the highest and lowest demand
(4 weeks to 17 July 2022 compared to the five-year average)