House price growth slowed to 6.5% at the end of 2022 representing the lowest rate of annual growth since May 2021, Zoopla’s house price index for December shows.
It comes as buyer enquiries dropped by 50% in Q4 while supply has increased with the average agent having 23 properties for sale, up from a low of 14 in early 2022.
But the property portal added that demand has risen slightly at the start of 2023.
Meanwhile, the average discount on the asking price is holding at between 3% and 4%, and buyers are expected to keep accepting offers.
3-bed houses remain most popular, but demand for flats is growing: 27% of buyers are now looking for 1-and-2 bedroom flats – up 5% in a year.
Sarah Coles, senior personal finance analyst, Hargreaves Lansdown, said: “Wait-and-see buyers will force sellers to wake up, smell the coffee, and cut their prices.Â
“The Zoopla House Price Index found that house price growth slowed again at the end of 2022, and the number of properties on estate agents’ books started to build, as buyers sat on their hands. It says sellers are going to have to cut their prices to shift their homes. However, it’s more optimistic about the future.
“After the 50% collapse in demand at the end of the year, it recovered a little in January. However, buyers are trimming their expectations, and turning their attention to flats. Demand for flats has grown in every region, and especially in commuter towns like Slough and Watford. They’re far cheaper on average – the average 2-bed flat outside London is almost £100,000 cheaper than the average 3-bed home. They’re also more cost effective to run – and to heat.
“Sellers are more resistant. It’s going to take a few weeks of quiet desperation and a dearth of viewings before they’re prepared to accept reality, so Zoopla is expecting more price cuts for properties that are already on the market in the first three months of the year – and into the spring.”
