Is the housing market starting to slow?
June 2, 2022
According to the latest research from Zoopla house prices have hit a new record high in April 2022, but the property market is showing signs of slowing. Houses are taking longer to sell and vendors are reducing asking prices.
Overall house prices have risen by 8.4% in 2022 up to the end of April and the average cost of a UK home has reached a new record of £250,200.
However, according to Zoopla's latest House Price Index, the time taken to sell a property and the number of price reductions on properties have increased.
From an agent's perspective the above is not unsurprising. For a wide array of reasons, as discussed in previous newsletters, there is a drought of new properties coming onto the market as homeowners decide to sit tight and at the same time demand from buyers is incredibly strong. In fact, the Zoopla research highlights that the number of potential buyers is currently 61% higher than the five-year average and the level of homes for sale is 37% lower than normal.
This imbalance in available stock versus buyers means that the 'good' properties when they do get listed, tend to go very quickly in a bidding frenzy, but they are few and far between. On the other hand, those less attractive properties that have been somewhat overpriced due to vendor expectations being too high, or possibly being mispriced by agents vying for business at the outset, are sitting around for long periods with buyers turned off by the exaggerated price tags.
At Vesta we are still seeing significant demand from investors and quality properties that are priced correctly continue to sell very quickly. There are pockets of higher demand and these tend to fit within areas where there is high rental demand and higher than average rental yields available, which is very attractive to investors seeking a good return.
This seems to fit with the Zoopla research where areas like London continued to lag other regions, posting house price growth of only 3.6% in comparison to Nottingham which saw a 10% increase, and Liverpool at 9.9% and Bournemouth at 9.7%.
Rising food and energy costs might have a bigger impact on the housing market in the months ahead but right now demand is still strong.
If you are considering selling or buying an investment property or simply want an investment valuation, please get in touch, or visit www.vestaproperty.com/sell so we can start the process with you.
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