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House prices rise at slowest pace for two and a half years

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01/07/2022
Demand is starting to decline and the number of reduced properties for sale is increasing
House prices rise at slowest pace for two and a half years

The average UK house price remained unchanged in June, inching up just 0.1% since May, according to Zoopla’s latest House Price Index.

The property portal said it’s the lowest rate of monthly price growth recorded since December 2019.

Property prices are still up 8.4% over the last year, a fall from the 9.2% annual inflation recorded in April.

Demand still high but declining

Demand for properties remains strong at 40% above the five-year average, but Zoopla found that demand is beginning to drop week on week, as the market returns to more ‘normal’ conditions.

The proportion of listings where asking prices have been reduced is also rising. One in 20 properties showed a reduction of 5% or more in May. That’s up from 4.7% in April.

The average price reduction is 9%, which equates to a discount of around £22,500 on the average property.

Gráinne Gilmore, head of research at Zoopla, said: “Buyer demand is still strong in the housing market, but signals are emerging that the impetus may be easing, so those who want to make a move should investigate their options sooner rather than later.

“In addition, mortgage rates are likely to continue to climb, so locking into a rate shortly could save hundreds over the longer-term.

“There are many factors supporting the price growth seen since the start of the pandemic, not least the continued imbalance between demand and supply, but the increasing cost of living, increasing mortgage rates for buyers and cloudier economic outlook will act as a brake on house price growth through the rest of the year.”

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