The average UK home has risen in value by £19 a day in the last 12 months, leading to an annual increase of £7,000, according to Zoopla’s latest analysis.
While some homeowners and sellers may have expected a different trend, this news comes as a positive sign.
However, the rate of house price increases has slowed down significantly, with some homes experiencing minor price drops. As always, the impact varies across the country, reflecting the hyperlocal nature of housing markets.
Richard Donnell, Zoopla’s executive director – research, cautions homeowners considering a move. “Homeowners thinking about moving will be reading the news headlines but national averages can be dangerous when making decisions on your own home,” he says, adding, “The reality is that market conditions can vary widely by local area and property type.”
From February 2020 to June 2022, the average UK home’s value skyrocketed by approximately £48 per day, contributing around £36,000 to the overall average value. But the last year paints a slightly different picture. While two-thirds of homes have increased in value by at least 1% over the last year, the rate drops to one-third when examining the last six months.
An increase in homes with falling values has been recorded, with one in four homeowners facing a value loss of £7,700 (approximately 2.6%). This slowdown in price growth reflects the weaker demand currently impacting the housing market.
The economic landscape has grown more challenging since mid-2022, with tripling mortgage rates and increased cost-of-living pressures adding strain to household budgets and weakening demand for homes. Consequently, the explosive growth in house prices experienced during the pandemic years has plateaued.
Despite this overall trend, some areas continue to witness increases in home values. Northern England, the Midlands, and Wales saw home value growth for four in ten homeowners since November 2022. In contrast, only one in four homes increased in value in Southern England, Scotland, and Northern Ireland.
Yorkshire and the Humber emerge as a hotspot for value increase with four postal areas, including Halifax (67%), Wakefield (65%), Huddersfield (59%), and Bradford (52%) among the top 10 regions experiencing growth.
However, in London, the South East, and Eastern regions, only one in five homes saw an increase in value. These areas’ property values are often higher, which coupled with current high mortgage rates, has reduced demand for these more expensive homes.
While two-thirds of homes saw value growth in the past year, the picture over the next few months is likely to be more complex. As price corrections loom, homeowners should prepare for limited gains or even minor decreases in home values.
