Zoopla: House sales set to hit a decade-low

The property market is set for its quietest year for sales since 2012, Zoopla claims.

The portal’s latest House Price Index estimates that the market is on track for 1m sales completions this year, which would be 21% below 2022 and the lowest amount for more than a decade.

Zoopla said the housing market continues to adjust to higher mortgage rates and cost-of-living pressures with weaker demand, fewer sales and very low house price growth. 

Looking at the past four weeks, Zoopla revealed that demand for homes is running 34% lower than the five year average, while sales agreed are down 20%.

Listings are up 16% in some good news for estate agents.

Based on trends during the first half of 2023, Zoopla estimates that cash sales will fall just 1% this year compared with 2022 levels. However, the number of mortgaged sales is projected to be 28% lower. 

Weaker demand, more price-sensitive buyers and fewer sales have also led to a “rapid slowdown” in house price inflation, Zoopla said.

Annual UK house price growth is now at 0.1%, the lowest annual rate since August 2012. 

There is also a north-south divide in house price inflation. 

All regions across southern England are registering year-on-year price reductions of up to 1%, according to the research, while all other regions and countries of the UK are posting low single digit price growth. 

Richard Donnell, executive director at Zoopla, said: “House price growth has slowed rapidly over the last year as demand weakens in the face of higher mortgage rates. Prices are falling more in southern England where higher mortgage rates have priced more people out of the housing market, weakening demand.  

“While UK house prices are 0.1% higher over the year,  it is the number of sales that have been hit hardest by higher borrowing costs, especially amongst mortgage reliant buyers. Cash buyers are more immune and on track to account for more than one in three sales in 2023. Mortgage rates have started to fall slowly but rates need to fall below 5% before we see an increased appetite to move home in the second half of 2023.”