According to Zoopla’s House Price Index, annual house price growth in the UK dropped to 7.2% in December.
The index also showed that quarterly house price inflation slowed from over 2% in the summer to just 0.3% in the last three months of 2022. This makes an annualised growth rate of just 1.4%. Experts at Zoopla expect this to turn negative by mid-2023.
Demand has been weakened across all regions of the UK due to higher mortgage rates, cost-of-living pressures and low consumer confidence. Sellers are accepting larger discounts to asking prices to achieve sales. The gap between asking price and sale price grew to 4% in December, from 0% in early October and it is expected that discounts will widen further in 2023.
Urban areas are likely to fare better in 2023 as workers return to cities.