Slowing House Price Growth in May: Zoopla Reports, Amidst a Four-Year High in Sales Rates
**Unequal House Price Growth Across UK Regions and Price Ranges**
In the current UK property market, house price growth varies significantly across different regions and price ranges. This disparity is influenced by several factors, including regional supply-demand imbalances, affordability, mortgage rates, and policy impacts.
Regions such as northern England and Scotland are experiencing above-average price growth, often exceeding 3.5% annually, due to lower housing supply increases. In contrast, areas in West London and parts of the South West have seen prices fall over 1% in the last year, largely due to higher supply and weakened demand.
Lower and mid-priced properties, such as terraced houses and semi-detached homes, have shown relatively stronger price growth, with annual increases of 2.0% and 2.5% respectively. On the other hand, flats and higher-end detached houses have had more subdued growth or slight falls. This suggests unequal growth across price bands, possibly due to differing buyer affordability and demand patterns in these segments.
The Bank of England's base rate drops since August 2024 have led to expected reductions in mortgage rates, boosting buyer purchasing power, especially for first-time buyers and those targeting lower to mid-price ranges. Conversely, high living costs and previously high mortgage rates had subdued price growth since 2022, particularly affecting higher-priced housing markets where affordability is more strained.
Changes targeting second homeowners and landlords, such as additional taxes, have led to weaker demand and increased sales by these owners in certain areas, contributing to localized slower price growth or price falls. Stamp Duty changes and other fiscal measures can also influence buyer behaviour unevenly across regions and price brackets.
The current market shows a steady but modest rise in prices nationally, supported by ongoing buyer demand and sales activity that varies regionally. Economic factors such as inflation stability and expectations of future interest rate cuts contribute to regional differences in buyer confidence and activity.
The number of sales increasing year-on-year demonstrates a continued desire of more households to move home in 2025. Buyers remain price-sensitive, especially in higher-value markets. The average home in the UK now costs £268,400, representing year-on-year growth of £3,960. House price growth has continued to outpace the nationwide average in parts of Scotland and northwest England.
In light of these trends, sellers are urged to seek advice on how to price their home correctly to achieve a timely sale. Serious sellers need to be realistic on where they set their asking price to achieve a sale in 2025.
References: 1. Zoopla House Price Index 2. Fraser Reeves 3. Executive Director at Zoopla, Richard Donnell 4. Sarah Cartlidge, branch manager at Fraser Reeves.
- In the realm of personal finance, understanding the newsletter updates on the unequal house price growth across UK regions and price ranges, such as the higher growth in northern England and Scotland, can aid in making informed real-estate investing decisions.
- For those focusing on lower and mid-priced properties in the UK housing-market, it's interesting to note that these property types have shown relatively stronger price growth, making them potentially attractive for investors in the current market.
- Keeping track of the newsletter's insights on factors like regional supply-demand imbalances, affordability, mortgage rates, and policy impacts can help personal finance enthusiasts anticipate how these changes might impact the overall finance landscape and their real-estate investments in the future.
