UK house price growth has slowed to 3%, according to Zoopla, as the market continues to register small quarter on quarter price reductions across the entire UK.

The property portal said this is the lowest annual rate of house price growth since July 2020. It added that house price growth varies from region to region with annual growth recorded at +4.8% in Wales and +0.5% in London – approximately less than a third of the levels recorded this time last year.

House price growth is also strong in areas that provide easy access to urban cities. For example, house price growth remains above average (over 5%) in areas such as Oldham in the North West, which is accessible to Manchester, Wolverhampton in the Midlands, near to Birmingham, and Selby in Yorkshire which is close to Leeds.

Zoopla predicted that ‘if current trends continue’, UK house price growth will be minus 1% by the end of the year.

Demand growing

Demand for homes reached its highest level so far this year, after Easter, said Zoopla. However it’s still down 42% compared to this time last year.

The stock of homes for sale continues to expand – now two thirds (66%) higher than this time last year.

New sales agreed are up 6% on 2019 and 10% ahead of the five-year average after Easter. That’s partly because sellers are being more realistic about their asking prices.

Richard Donnell, executive director at Zoopla, said: “Housing market conditions continue to improve as buyers return to the market and more sales are agreed. House prices are posting very modest falls and are expected to be just 1% lower by the end of the year. The worst of the pricing adjustment appears to be behind us.”

Sarah Coles, head of personal finance at Hargreaves Lansdown, added: “Annual house price growth is just 3%, but Zoopla figures found that spring has worked wonders on our enthusiasm for homeownership. It says buyer demand has hit a 2023 high, 66% more new properties have hit the market, and sales are ahead of the five-year average.

Buyer demand is lower than this time last year, but at that point there was an awful lot of frustrated demand because of the property drought. A better balance of supply and demand means would-be buyers are more likely to be able to find something they want. It’s why Zoopla sales were 10% ahead of the five-year average after Easter.”