People looking to buy a property are being left confused by the current state of the housing market, as prices continue to fluctuate.
The most recent House Price Index from Halifax has revealed values increased over February, rising by 1.1 per cent. This took the average house price from £282,360 in January 2023 to £285,476 just a month later.
This comes after seven months of falling or stable values. Despite this, there has been a quarterly drop of 2.5 per cent leading to February this year, and annual price growth has declined from 12.5 per cent at its peak in June 2022 to just 2.1 per cent last month.
Indeed, the average value of a home in the UK has dropped by more than £8,000 since August when it had reached £293,992.
Consequently, buyers are not sure when is a good time to purchase their next home, uncertain if prices will continue to fall and they will be left with a house of depreciating value. At the same time, they could rise and they might end up paying more for a property in a few months’ time than they would at the moment.
Reporting on the state of the market, Halifax Mortgages’ director Kim Kinnaird noted: “Recent reductions in mortgage rates, improving consumer confidence, and a continuing resilience in the labour market are arguably helping to stabilise prices following the falls seen in November and December.”
She added that despite this, there is a “general downward trend” with prices.
This follows reports from Zoopla, which revealed vendors are typically lowering their asking prices by 4.5 per cent to sell their home. This amounts to an average drop of £14,100 for each house or flat.
The property aggregate site also noted that buyer demand and sales volumes have declined by between 20 per cent and 50 per cent over the last year.
Sellers should not feel too dismayed though, as Halifax revealed values are £9,000 above what they were at the beginning of 2022 and are higher than they were at the start of 2020, before Covid-19.
Indeed, Zoopla stated properties rose in price by an average of £42,000 over the pandemic, so this recent £14,100 discount still means they are only losing a third of the increase in value.
Therefore, vendors will “retain price gains made during the pandemic”, according to Ms Kinnaird. The steep rise in values over the last few years has made it extremely difficult for buyers to get on, or climb, the property ladder, whereas this recent decline could make it easier for them.
She recognised, however, that “housing affordability will continue to feel challenging for many buyers”.
If you have been able to raise the money to buy a house for sale, contact our conveyancing solicitors in Surrey to help with the purchasing process, so you can get the keys to the property before any more major price fluctuations.
