The demand for homes rebounded in the first few weeks of January in line with pre-pandemic levels but it seems that the start of 2023 is more of a slow burn with wannabe buyers waiting to see if prices and mortgage rates fall, says Zoopla.

The scarcity of supply in the market also appears to be reversing – the average estate agent now has 23 properties for sale – up from a low of just 14 homes in early 2022.

RISK

But Zoopla says a key risk to overall sales volumes for 2023 is unrealistic seller expectations.

Meanwhile buying preferences have shifted towards flats with over a quarter of new buyers (27%) now looking for one and two-bed flats.

In contrast, the share of demand for three-bed houses has fallen to 39%, although they are still the most in-demand homes across the UK.

Richard Donnell, Executive Director at Zoopla, says: “The first few weeks of the year have got off to a stronger start than might have been expected given how market activity stalled at the end of 2022.

“There has been a clear shift towards flats as the early buyers focus on value for money and adjust expectations given the hit to buying power from higher mortgage rates.

“Anyone serious about selling needs to be realistic on the asking price and needs to ensure this is in line with what buyers are prepared to pay. “

HONESTY

Tom Ashwood, Director of London agency Tom Ashwood Real Estate, says: “Managing expectations for all sellers is a vital component to achieving sales in the present market and honesty really is the best policy.

“The demand will automatically subside where buyers do not see a reflective price for a property that they are viewing versus what their expectations are – and when an agent lists a property at a higher price to appease the seller and win that business.