Zoopla says a “widespread repricing” is underway in the sales market, but with no sign of cooling yet in the lettings sector.
The portal, in a market snapshot, says falling demand and sales means new and current sellers are being forced to set asking prices at lower levels to help secure buyer interest.
Some 11 per cent of homes – or one in nine – have recorded a price reduction of five per cent or mort. A quarter of homes have had a price reduction of some kind since the start of September.
Asking price reductions are greatest in Southern England, where sales volumes have fallen the most with almost one in three homes in the South East and East of England reducing asking prices to attract more demand.
The UK’s current house price inflation has slowed to 7.8 per cent the slowest rate of growth recorded since November 2021 following October’s mini budget which then saw the property market stall.
Zoopla says the market is transitioning from an unsustainably strong position to one that is now “more balanced” – albeit with affordability challenges for homebuyers most reliant on mortgage finance and a weaker economic outlook for 2023.
Buyer demand is down 44 per cent.
New sales have fallen by up to 50 per cent in the previous market hotspots and high-value areas where higher mortgage rates will hit buying power hardest such as the mid to upper price bands in Southern England (excluding London), East Midlands and Wales.
Sales have fallen less in more affordable areas and London where market conditions have been weaker.
The portal states that house price inflation is losing momentum fast with sellers now having to accept discounts to asking prices in order to achieve a sale – a trend that has become more apparent in recent weeks.
Richard Donnell, executive director at Zoopla, comments: “The housing market is adjusting to a reset in the level of mortgage rates but the likelihood of double digit house price falls at a UK level remains low.
“While the outlook for house prices is weak, we see a shift to more needs driven motivations to move in 2023 and beyond which will support sales volumes. Ongoing pandemic impacts, increased labour market flexibility plus more retirement will continue to encourage moves.
“Cost of living pressures will compound these trends encouraging home owners to consider their next move. The rapid growth in rents, which shows little signs of slowing, will add to cost of living pressures and add continued impetus to first time buyer demand.”