The UK’s property market is experiencing a significant slowdown, with the number of house and flat
sales projected to be the lowest in ten years, according to data from prominent property website
Zoopla.
Their monthly house price index, which monitors homes sold under contract, revealed a 20% decline
in sales compared to the previous year. Zoopla forecasts that 2023 will witness the lowest sales
figures since 2012, estimating roughly one million completions by year-end.
This statistic equates to the average household relocating every 23 years, a far cry from the usual
eight-year interval, as highlighted by Zoopla. The company attributes this trend to the profound
impact of recent economic changes on the housing market.
Other property firms and lenders have also reported a downward trend in the housing market. For
instance, the Nationwide Building Society noted the sharpest price drop in 14 years in July. While
some lenders have reduced mortgage rates, the mounting cost of borrowing has negated these
benefits.
Zoopla points out that the anticipated 21% reduction in property sales by the close of 2023 is mainly
attributed to a decline in mortgaged buyers. The company predicts a 28% decrease in mortgaged
sales compared to the previous year, while cash sales are anticipated to drop by just 1%.
The Bank of Englands continuous interest rate hikes, totaling 14 increments, aim to curb inflation
but have also resulted in higher borrowing costs. This factor, coupled with escalating living expenses,
has led to weaker demand from buyers, fewer sales, and minimal house price growth, according to
Richard Donnell, Executive Director at Zoopla.
Despite the current challenges, Donnell remains optimistic about the market's future. He anticipates
a sales rebound over the next two to three years, driven by factors such as flexible working
arrangements, demographic shifts due to an aging population, a robust labor market, and
substantial immigration.
In conclusion, the UK’s property market is grappling with a significant sales downturn, which Zoopla
attributes to economic shifts and higher mortgage rates. While the short-term outlook remains
cautious, the potential for recovery is seen in the medium term due to several positive trends on the
horizon.
