House prices post lowest monthly growth since 2019, says Zoopla

Property prices rose at the lowest monthly rate since 2019 in May, according to Zoopla, as the economic outlook and base rate increases began to “hold back confidence and activity.”

Prices rose 0.1 percent for the month, the smallest monthly increase since December 2019, according to the real estate portal’s House Price Index.

In the year through May, home values ​​rose 8.4 percent, compared with 9.2 percent in the year through April.

Year-on-year growth: Zoopla said house prices rose 8.4% in the 12 months to May

On a quarterly basis, prices rose 1.4%, the lowest level since March 2021. The typical house now sells for £251,550.

Zoopla predicted that while property price growth levels would slow for the rest of the year, house prices would not decline.

He estimated that prices would grow 3 percent in the year to December 2022.

“We expect price growth to start to recede, reflecting the fact that buyer demand is beginning to normalize from record highs, although it is crucial to note that demand levels are still more than 30 percent higher. than the five-year average. she said.

“The economic outlook and multiple base rate increases will act as a drag on confidence and activity as we move through the remainder of the year.”

While Zoopla said demand for properties was still high compared to the five-year average, it said it was beginning to ease back to “more normal levels.”

He reported that the median time to sell a home, from listing to agreed sale, was increasing, from 20 days in March to 22 days in May.

Falling Demand: While shopper appetite remains above the five-year average, it is declining

Falling Demand: While shopper appetite remains above the five-year average, it is declining

The decline in demand, Zoopla said, was partly due to rising mortgage rates following successive Bank of England base rate hikes.

Buyers now face average rates of 3.37 percent for a five-year fixed-rate loan, according to Moneyfacts, compared with 2.64 percent in December 2021.

This, Zoopla said, would raise the annual cost of a loan for an average-priced home (£250,000) with a 25 per cent deposit and a 25-year term by £870.

Gráinne Gilmore, Zoopla’s director of research, said: “Buyer demand remains strong in the housing market, but signs are emerging that momentum may be waning, so those wanting to make a move should do their research. their options sooner rather than later.

“In addition, mortgage rates are likely to continue to rise, so locking in a rate soon could save hundreds in the long run.”

High on the table: Wales saw the biggest growth in house prices at 11.4%, Zoopla said

High on the table: Wales saw the biggest growth in house prices at 11.4%, Zoopla said

Wales leads price growth, while London lags behind

Wales had the strongest price growth, according to Zoopla, with prices rising 11.4 percent on the year, while London saw the least growth at 3.9 percent. This was similar to yesterday’s Nationwide report.

Of the UK’s largest cities, Nottingham had the highest price growth in the year to May at 10.4 per cent, taking median home values ​​to £190,300.

Bournemouth followed with 10.2 percent. The Dorset city ousted Hastings as the southern seaside area with the fastest rate of house price growth.

The fastest-moving market was the Southwest, Zoopla said, with the average time between listing a home and a sale agreement of less than three weeks (19 days).

Nick Leeming, president of the Jackson-Stops real estate chain, said: ‘It’s not surprising to see the South West market going against the cooling tide.

‘Our Exeter office saw an almost 40 per cent increase in inquiries from buyers in May, far outpacing the level of instructions there. This allowed some sellers to be more bullish on their requests, increasing competitive bids and testing buyers’ agility for quick movement.

But Zoopla also said homebuyer demand in the Southwest had seen the steepest drop over the past month, falling 14 percent, though still 37 percent above the five-year average.

Houses in London stay on the market longer, with an average of 35 days between listing and sale agreement.

Zoopla has forecast that house prices will grow, on average, 3% in the year to December

Zoopla has forecast that house prices will grow, on average, 3% in the year to December

Leeming added: ‘I think we will look back and note the first quarter of 2022 as the absolute pinnacle of post-pandemic related excitement, with an incredible amount of momentum building up.

“But the stomping among the buyers that we have seen is unlikely to continue. It is now clear that April will be remembered as a market turning point.

“We are already seeing a lot of overambitious sellers return to the realms of reality.

‘The summer market will probably be characteristic of a more stable future. What we’re seeing is more supply coming to the market in most regions, partly because we think house prices are peaking, but also to secure the best mortgage rates as the money age ultra-cheap comes to an end”.

The best mortgage rates and how to find them

Mortgage rates have risen substantially as the Bank of England base rate has risen rapidly.

If you’re thinking about buying your first home, moving or remortgaging, or are a buy-to-let landlord, it’s important to get good, independent mortgage advice from a broker who can help you find the best deal.

To help our readers find the best mortgage, This is Money has partnered with independent broker L&C.

Our L&C-powered mortgage calculator can allow you to filter offers to see which ones best match your home value and deposit level.

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