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Weakened demand sees return of buyers’ market

The booming house sales market was unsustainable and is now starting to balance out to pre-pandemic levels.

Robyn Hall

The booming house sales market was unsustainable and is now starting to balance out to pre-pandemic levels, Propertymark says.

Stephen McCarron, NAEA Propertymark President, believes the latest Zoopla report reiterates what their member agents have been saying.

UNCERTAINTY

UK house prices increased by 8.3% or £19,800 in the past 12 months according to Zoopla but buyer demand is starting to wane as economic uncertainty increases.

Buyer interest this summer was weaker than last year but still above the 2017-2022 average.

Richard Donnell, Zoopla

Richard Donnell, Zoopla Research Director, says: “While allowing for seasonal factors, we expect demand to continue to underperform against last year as we move into the autumn.

“Demand for homes in London continues to lag the rest of the country due to pandemic and affordability-related factors with annual price inflation (4.1%) less than half the UK average.”

But he adds: “The lack of a material over-valuation in UK home values means mortgage rates rising to 4% are not, on their own, sufficient to result in UK-wide price falls.”

Stephen McCarron

Stephen McCarron, Propertymark

McCarron says: “The sales market was unsustainable and we are now starting to see it balance out to pre-pandemic levels.

“Our latest figures in our Housing Insight Report showed us for the first time that we are on the cusp of seeing the sales market handing back purchasing power to buyers which is a trend we haven’t seen in months as the market was very much in the seller’s favour.”

And he adds: “Signs of balance within the market is also being seen as competition for homes starts to slow which will allow the number of properties available to buy to fall back in line and a return to a more realistic market.”

COST OF LIVING

Elsewhere Zoopla found that the cost of living was hitting lower income households hardest, while those that buy homes tend to be on higher incomes.

Indeed, the average first-time buyer will need an extra £12,250 in income to buy a home compared to a year ago and up to £35,000 more in London.

November 29, 2022

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