There are signs of the housing market starting to slow down, according to Zoopla, which has revealed evidence more buyers are being forced to knock down their asking price.
Data from the property website for April revealed the average price of a UK home had hit a new high, exceeding the quarter of million benchmark to hit £250,200.
However, despite this growth of 8.4% over the year, Zoopla said the rate of house price growth was starting to slow. Indeed, back in March the annual growth was 9% but, by the end of the year, Zoopla expects prices to be rising by 3% annually.
What’s more, it also said it had noticed the number of price reductions increasing – with one in 20 properties listed on the website undergoing price cuts of more than 5% compared with one in 22 in March.
Average new asking prices were around 9% below the original, said the property website.
Homes are taking longer to sell
In addition, the time taken for sales to be agreed has also extended. Zoopla said, outside of London, the average time between listing and sale agreed for a three-bed house was up from 16 days in March to 18 days in April. In London, this figure is up from 17 days in March to 21 days in April.
Gráinne Gilmore, head of research, Zoopla, said: “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.”
‘Down valuations’ are also increasing
Experts have predicted the extraordinary house price growth we have seen in recent times would not last with the cost-of-living crisis now setting in and hitting household finances.
With mortgage rates also increasing, repayments are getting more expensive, which makes borrowing money for a new home less attractive.
According to Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, the fact sellers are being asked to knock ‘tens of thousands’ off their asking prices and sales were taking longer provided strong evidence the market had hit its peak.
However there is another factor showing price growth was slowing – down valuations. This is where the mortgage lender’s valuation, carried out after a sale has been agreed, is lower than the asking price.
She added: “The brokers I’ve spoken to say another key sign of a slowdown in price rises is the number of mortgage valuations that are coming in under the asking price.
“The mortgage company has to carry the can for any overpricing, so they’re the ones with a keen eye on the objective value of a property.
“If an estate agent, buyer and seller are all getting carried away, it’s the valuer who brings reality crashing down on them. Valuers have been thinking that houses are over-priced for a while.”
