Zoopla has reported that average property prices were broadly unchanged in May at 0.1%, which is the lowest rate of monthly price growth since December 2019.
Annually, property prices are up +8.4%, compared to +9.2% growth in April, with quarterly growth at 1.4% – the slowest since March 2021
Buyers are facing average rates of 3.37% for a five-year fixed-rate loan now, compared to 2.64% in December, on a £250,000 loan, with 25% deposit – increasing the annual cost of a new mortgage by more than £870.
Buyer demand is still higher than the five-year average, but it continues to decline week on week on a return to ‘more normal’ levels of demand.
The property market in the South West remains the most buoyant with the average property taking 19 days between listing and offer accepted – with Bristol, South Gloucestershire, Plymouth, Swindon and Exeter the fast moving markets due to more stock and choice in these areas.
London continues to lag behind as the UK’s slowest moving market with time to sell currently at 35 days compared to 22 days nationally – however, this is still above the May five-year average of 50 days.
Despite Wales and London being at opposite ends when it comes to house price growth (11.4% vs 3.9%) – it equates to a similar increase in monetary terms, highlighting the disparity in regional house prices across the UK. Average values in Wales are up by £32,000 over the last 24 months taking prices to an average of £192,500. This contrasts to £30,000 in London over the same period, with average house prices of £516,100.
Of the UK’s largest cities, Nottingham has the highest price growth at 10.4%, followed by Bournemouth at 10.2%. Nottingham has been among the top performers in terms of price growth for the last year, with the relative affordability in the city increasing its appeal, while the rise in prices in Bournemouth reflects the ongoing appetite for coastal living.
However, the slowdown in the speed of agreeing a sale is expected to continue – with demand for houses in the South West seeing the sharpest slow-down over the last month,- 16% for flats and -14% for houses.
Emma Hollingworth, distribution director at MPowered Mortgages, said: “The latest Zoopla house price index shows that house prices are up 8.4% on the year, taking the average value to £251,550. Rising house prices, coupled with rising interest rates, is making homeownership less and less affordable. For many of those looking to buy their next home, time is now squarely of the essence – securing a mortgage, and indeed a purchase, as quickly and efficiently as possible in order to ensure this remains financially viable, is key.
“Looking at rates alone, MPowered Mortgages has worked out that a homeowner could save over £2,000 over a two-year period if they lock into a deal now versus at the end of the year if mortgage rates rise alongside the base rate by a further 0.5%. It is becoming increasingly clear that further savings can be made by buying a property sooner rather than later – just because prices are now rising at a considerable speed.
“The current climate is exacerbated further by demand for properties remaining high, whilst supply remains relatively low. Those able to move through the homebuying process quickly are going to be at a critical advantage to others looking to purchase the same property.”
