Rising living costs and housing affordability challenges are restraining house prices in southern England.
Zoopla’s house price indices show that 64% of homes are still experiencing annual price declines, though these are relatively modest, typically between 0% and -3%. This is an improvement from last October when 82% of homes were in declining markets.
In southern England, the majority of homes (95-100%) are in local markets with annual price falls, with similar trends in the East Midlands (93%).
However, there are signs of pricing improvement in six regions outside southern England. Scotland has some areas with lower prices, but nationally, prices remain stable. This is typical of the UK market, with places like the North West and North East predicted to see over 20% capital growth over the next five years (per Savills).
Executive Director at Zoopla, Richard Donnell, said: “The rebound in sales being agreed continues for a fourth month as mortgage rates have fallen, consumer confidence improves, and home buyers have a much greater choice of homes for sale. The pipeline of sales is growing, and we expect 100,000 more people to move home in 2024 than last year.
“There is clear evidence that house prices are firming and the pace of price falls is slowing. We don’t believe that prices will start to rise as buyers face much higher mortgage repayments than in the recent past.
“The market is adjusting to higher borrowing costs, and what we need is continued price stability, which will create the environment for continued growth in sales and home moves. It’s important sellers remain realistic on what they can achieve for their home.”
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