House price growth drops to its lowest rate since 2020

Additionally, the last three months have been the slowest rate of quarterly price growth – 0.7% – since February 2020 as fewer people look to move. However there have been no price falls in major cities or regions during this period – although the real estate company expects this to change with there soon being quarterly growth of zero percent, before falling in 2023.  

Zoopla’s director of research and insight Richard Donnell said: “We still expect house price falls of up to five percent next year with one million sales and mortgage rates dipping below five percent. But the number of sales going through will remain buoyant for a range of structural, demographic and economic factors.” 

As part of its research, the firm has said widespread repricing of homes for sale has already begun – with one in four sellers reducing the price on their home since the start of September, while 11% have reduced their price by five percent or more. Despite this, these are relatively modest price reductions when compared to historic data and there are still fewer price reductions than in 2018.  

This, according to Zoopla, signals a return to normal pre-pandemic market conditions rather than giving cause for concern about a housing market crash.  

Looking at the rate by region, the price reductions have been seen greatest in the south of England where the number of sales has also fallen the most. Broken now, in the south east and east of England almost one in three homes for sale have had their asking price reduced since the start of September.  

Buyers are also starting to get bigger discounts from sellers, with the average discount widening to three percent in recent weeks and, whereas sellers could expect to achieve 100% or more of their asking price in 2021 and 2022, the “tide is turning” in favour of buyers.  

Zoopla does expect discounts to increase further but most sellers will have a little room to reduce their price and achieve a sale.