With London property prices down nearly 25% over the past five years, Zoopla is witnessing a resurgence in the desire for urban properties and apartments and a decline in the appetite for coastal and rural properties that existed during the COVID-19 era.
The average UK property is now £17,500 more costly than it was a year ago, but the house price rise has moderated and London properties are over 25% less expensive than they were five years ago, according to data from the property website Zoopla.
According to Zoopla, house prices have increased by 7.5% over the past year, albeit the trend has slowed to 0.3% over the past three months.
This slowdown is anticipated to continue into 2023 when prices will begin to drop toward the middle of the year.
According to the data compiled by Zoopla, home prices have climbed by 22% over the course of the past five years, exceeding the growth of average incomes.
As a result of a combination of increasing mortgage rates, cost-of-living constraints, and poor consumer confidence, however, the price of a home is anticipated to decline as demand declines.
According to Zoopla, the impact of increasing mortgage rates is felt least in more inexpensive markets and most strongly in the most expensive regions of the United Kingdom.
The upper end of the market has experienced a slower price increase, but where prices are more expensive, increasing interest rates have a greater impact on borrowers.
In the wake of the September mini-budget, mortgage rates increased as expectations grew that the Bank of England would hike interest rates beyond forecasts to curb inflation, which many believed would escalate due to unfunded tax cuts and expenditures on energy assistance.
According to data from the Bank of England, the number of mortgages authorized by lenders in October dropped to its lowest level in over two years following the mini-budget.
Several companies withdrew mortgage products from the market due to market instability.
In the previous month, Zoopla reports that sellers have accepted offers that are 4% below their asking price to clinch a sale. This indicates that the market has already begun to decline.
Trends observed during the COVID-19 epidemic are beginning to reverse as the demand for apartments and metropolitan regions increases and the demand for rural and seaside residences decreases.
According to Zoopla, homebuyers who earlier desired space and the ability to work from home may be deterred by the price increases in these locations over the past two years.
So, while London property prices have decreased by 24%, the demand for urban neighborhoods close to jobs and services has increased.
Places like Bradford, Swindon, Coventry, Crewe, Milton Keynes, and Southend have benefited from this urban buyer interest.
Similarly, demand for and sales of properties in coastal and rural areas have decreased at a faster rate than in other regions.
This trend is visible in portions of the south of England, such as east Kent, Torquay, and Portsmouth, as well as the Lake District and central Wales.
