House Prices Predicted to Fall as Buyer Demand Decreases
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Data from the Land Registry is showing that while buyer demand has declined, sellers are still rushing to list their homes. As a result, this could accelerate the rate at which house prices fall in 2023.
Although data from the Land Registry has shown that house prices have plateaued with a monthly rate of growth remaining at 0%. However, the data also shows that there are fewer buyers entering the housing market. With the rate of mortgage rates being declined, with the rate of approval falling by -3.8% in the last six months alone and -7.3% annually, many people are having to wait till the mortgage rate drops before buying a house.
Read more about how interest rates will affect the housing market.
More Houses on the Market as Buyer Demand Decreases
Despite house prices plateauing, the market analysis conducted by House Buyer Bureau shows the number of homes reaching the market for sale across Britain has increased by 16% compared to six months ago. The analysis suggests that home sellers are still listing their properties on the market in the hope of securing a buyer before the market decline gets worse and the value of their home reduces.
With the surge of houses still making their way to the housing market, the housing market looks to cool. With more houses reaching the market, and fewer buyers available to secure a property, house prices are looking to fall as there is a decrease in buyer demand and an increase in houses available to buy.
East of England Seeing Largest Surplus of Sale Stock
The East of England is seeing the largest surplus of sale stock, as there are 23% more homes entering the market for sale in comparison to six months ago.
In addition, the Northwest and Wales have also seen a large increase at 21%, followed by the East and West Midlands at 18% and 16%.
The same pattern is being seen in cities. There are 113% more homes being listed for sale across Leeds compared to the level seen back in July of this year. A similar pattern is being seen across other UK cities:
- Liverpool – 31%
- Nottingham – 27%
- Leicester – 26%
Manchester – 23%
Comments From Managing Director of House Buyer Bureau, Chris Hodgkinson
“We’ve seen numerous indicators that the market is running low on steam, but this is yet to deter the nation’s home sellers, who have continued to flood the market to an even greater extent than six months ago when the pandemic property market boom was still in full swing.”
“Of course, many are doing so in hopes of securing a buyer before the current cool in the rate of house price growth materialises into an actual decline. However, we’ve already seen the level of buyers entering the market start to dwindle as a result of increasing mortgage costs and so they may well find it tougher than expected to secure an offer on their home.”
“So not only are we seeing more homes listed for sale, but there’s also less buyers looking to purchase and when you consider these two factors together, the likelihood is that this surplus for sale stock will actually help accelerate a drop in house prices.”
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