One of the common have released their latest House Price Index which has shown that despite the average price of residential property exceeded £250,000, there are signs that the market is slowing down.
The reason for the slowdown could be that homeowners are facing increasing pressure on their finances as a result of the cost-of-living crisis.
Rising house prices coupled with increasing interest rates means that the cost of repayments for new mortgages in the UK has also risen which has put further impacted households.
Despite the predicted slowdown, the housing market remains much busier than pre-pandemic levels. House prices showed an increase in April year-on-year with an average of 8.4% which was a decrease from 9% in March. It is forecast that that house price growth is set to fall by +3% by the end of 2022.
Not only this, but it appears it is taking more for estate agents to reach sales agreed compared to the previous month before.
Outside of the capital, the average time between listing and sale agreed for a three-bed home has increased from 16 days in March, to 18 days in April. Inside of London, average time has increased from 17 days in March, to 21 days in April.
The number of price reductions are also increasing. Figures show that 5% of properties being listed where sellers have ended up cutting the asking price.
A pattern has been seen across every region in Britain in relation to price reductions. Since the second half of April, 5.1% of properties that were listed had a price reduction which was an increase from 4.7% in the previous 28 days.
Figures show that the average reduction seen is around 9%. When this is applied to the average price of UK homes, this equals a reduction of approximately £22,500. Looking at reductions regionally, it appears that one in 16 properties in the North East have had a 5% reduction. In the West Midlands, around 4.5% of homes listed have had the price cut by 5%-plus.
Furthermore, the property website claims that they continue to see a supply-demand imbalance throughout the UK.
Gráinne Gilmore, head of research at a popular property, commented: “High levels of buyer demand mean that the market is still moving quickly, but the time to sell – the time taken between listing a property and agreeing a sale – is starting to rise across most property types in most locations.
“We expect that this measure will continue to rise during the rest of the year as buyer demand levels start to fall, punctured by changing sentiment around the cost of living and personal finances.
“Another signal that the market is starting to soften is the number of properties where asking prices are being cut by more than 5%. Some one in twenty properties has been re-priced this month, with the average new asking prices some 9% below the original.
“The annual rate of price growth will ease this year, on a monthly basis, price growth has already moderated. A continuation of this trend, even with some small monthly declines, means price growth will reach +3% by the end of the year.”