House prices are predicted to rise more slowly this year
Average house prices rose by 7.8 per cent in the year to January, taking the average house price to £244,100, according to the latest Zoopla report.
House price growth over the same period in Yorkshire and the Humber was 8.5 per cent in January with Wales showing the highest rise with 11.7 per cent, followed by the South West with 9.7 per cent and the North West with 9.2 per cent. London had the slowest growth at 3.1 per cent. Zoopla analysts say that the new year surge in buyer demand is starting to ease, albeit at a modest pace and add that there are good signs for future stock levels, with new supply running ahead of 2021 levels in every region.
Scotland, the East Midlands, the North East and Yorkshire and the Humber, saw new listings over the last two months exceed levels seen in 2017-2020 over the same period, a sign that more homes are coming onto the market. There has been a particular rise in family homes listed for sale, which should help deflate rapid price growth.
Zoopla predicts that prices will begin to slow during 2022 and will end at an average 3.5 per cent in December 2022. However, it adds that the market is highly localised with price growth over the year to January 2022 ranging from 16.6 per cent in Powys in Wales to -2.2 per cent in the City of London.
Affordability, working practices and property type are all factors that have determined gains over the last two years.
Liverpool leads the city growth with residential property values up 10.3 per cent between January 2021 and January 2022 and Aberdeen saw the greatest price decline of -0.3 per cent. Sheffield recorded an 8.7 per cent uplift and Leeds a 8.2 per cent gain.
While new listings for flats is higher, there is still a shortfall in new listings for terraced, semi-detached and detached homes compared to longerterm norms, and signals that the dent in total stock levels for these homes will take longer to right itself.
Family homes continue to sell very quickly, with threebedroom houses across the UK reaching sale agreed status by an average of 23 days after being listed. This compares to a onebedroom flat in London which takes on average 53 days from listing to sale agreed.
This slower moving flats market means the average price of an apartment across the UK rose by 2.6 per cent in the year to the end of January. This is the highest level of growth for flats since 2017 but it still trails price growth for houses – with the average value of a semidetached home in the UK rising by 9.1 per cent over the same time frame.
The ongoing building safety crisis has affected the sale of many flats and owners continue to fight for justice while receiving unfair bills they can’t afford to fund. Housing Secretary Michael Gove has offered hope but progress is slow due to complexity and bureaucracy amid the bid to make the housing industry pay.
Zoopla believes that economic headwinds, including the increasing cost of living, which is affecting gas, electricity and fuel prices, together with rising mortgage rates, will soon start to put the brakes on house price growth.
The global uncertainty and volatility resulting from the invasion of Ukraine, will have economic impacts around the world, including the UK, hence the property portal revising its forecast to 3.5 per cent for average house price increases in 2022, which is still good growth for homeowners and investors.
This predicted slow down will benefit first time buyers, who are vital for a healthy market.