The number of house and flat sales in the UK this year is set to be the lowest in a decade, according to new figures from a leading property website.
Zoopla’s monthly house price index, which tracks the number of homes sold subject to contract, found levels were down a fifth so far compared to 2022.
It forecast that sales will be the lowest since 2012 by the end of the year, although it still expected around one million completions to be made in 2023.
It is the equivalent of every household in the country moving once every 23 years – far below the average of eight years, Zoopla said.
The firm said it “highlights the deep impact of recent economic changes on the housing market”.
It comes following a raft of figures from other property firms and lenders in recent months which also suggest a slump in the housing market.
They include the Nationwide Building Society, which said prices experienced the sharpest fall in 14 years in July.
However, the rising cost of borrowing is thought to have cancelled out any benefit, even though some lenders are now cutting mortgage rates.
Zoopla said the expected 21% decline in property sales by the end of 2023 was largely due to a fall in buyers with mortgages.
“We expect the number of mortgaged sales to drop 28% on last year. On the other hand, cash sales will fall just 1% compared to 2022,” the company said.
The Bank of England has raised interest rates 14 times in a row as it battles to bring down inflation and has warned they are likely to remain high for some time.
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Zoopla executive director Richard Donnell said: “The housing market continues to feel the impact of higher mortgage rates and cost of living pressures.
“It’s resulting in weaker demand from buyers, fewer sales and very low house price growth.”
But Mr Donnell said he expected the number of sales to “recover well” in the coming two to three years due to “more flexible working, demographic trends from an ageing population, the strong labour market and high immigration”.
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Renters now in the majority in UK
He added Zoopla expected mortgage rates to fall below 5% later this year, but warned it would be a “drawn-out process”.
“Any falls to mortgage rates are unlikely to impact the market and improve affordability further until at least the first half of 2024.
“This is why we’re less optimistic about house price growth, which looks set to stay within the +2% to -2% range for the foreseeable future,” Mr Donnell added.
The Zoopla report also found that UK house prices have risen 0.1% in the last year, which is also the slowest rate since 2012.
The annual change in the cost of buying a home in August ranged from a rise of 1.7% in Scotland to -1% in London, the firm said.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “As wages rise relative to property prices, we know that once mortgage rates go low enough, we should see affordability to start to work its magic on the market again.
“The problem is that predicting exactly how low rates need to go, and when they’ll get there is a tricky business.”
Matt Thompson, head of sales at London-based estate agent Chestertons, said buyers had been more cautious and in some cases were delaying purchases.
He added: “However, there still are buyers who have already locked in a mortgage rate with their lender and are keen to secure a property before the rate expires.”
UK
‘Major incident’ declared in Northern Ireland as wildfire breaks out amid higher-than-normal temperatures
A major incident has been declared in Northern Ireland after a wildfire broke out, the latest in a series of blazes seen across the UK over the past week amid soaring temperatures.
More than 100 firefighters and 14 fire appliances were at the scene of the “significant” wildfire on Sandbank Road, Hilltown, Northern Ireland Fire and Rescue Service said.
The fire had a front of approximately two miles “including a large area of forestry close to property”, the service said.
The wildfire on Sandbank Road, Hilltown. Pic: Sky Watch NI
“Local residents are requested to avoid the area, a number of roads have been closed, to help support firefighting operations,” the fire service added.
“We ask that all members of the public remain particularly vigilant to the risk of fire at this time. We can reassure members of the public that normal service delivery is being maintained.”
More than 100 firefighters were at the scene of the fire. Pic: Sky Watch NI
Various fires erupted across England this week amid uncharacteristically warm and dry conditions for the time of year.
On Saturday, helicopters were deployed to tackle Scotland’s fourth wildfire this week, with police saying a blaze “which started in the Newton Stewart area has spread northwards and is expected to reach the Loch Doon area of East Ayrshire around 12am on Sunday”.
Police Scotland added: “As a precautionary measure members of the public are asked to avoid the Loch Doon area and anyone who may be camping in the area is advised to leave.”
Moors Valley Country Park blackened by fires this week
Elsewhere in England, Devon and Cornwall Police said they were assisting the fire service with temporary road closures on the A30 in the Bolventor area as they tackle “a number of fires” on moorland.
In Dorset, Moors Valley Country Park was forced to close after multiple wildfires broke out there on Wednesday.
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Wildfires spread across nature reserve
Separate incidents were then reported at Upton Heath in Poole on Wednesday, and nearby Canford Heath in the early hours of Thursday.
Friday was officially the warmest day of the year so far – with temperatures in the south of England reaching 23C (73.4F) – the highest since 21 September last year, according to the Met Office.
The weather conditions triggered a “severe” wildfire rating for parts of the UK on Tuesday.
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