Britain’s housing slowdown leaves more homes on the market
BRITONS brave enough to buy a home in the midst of the housing downturn have 66 per cent more properties to choose from compared with a year ago.
An average of 25 homes were available to buy in each estate agency branch last month, based on a report from property portal Zoopla. That is up from 15 a year ago and the most since 2020, signalling a slowdown in dealmaking in the wake of pricier mortgages and a cost-of-living squeeze.
“The scale of housing demand has moderated compared to the frenetic period over the pandemic,” said Richard Donnell, executive director at Zoopla. “Homes are selling less quickly and this is creating more choice for buyers.”
Britain’s housing market is in the midst of a slowdown triggered by higher borrowing costs and a possible drop in house prices. Homeowners are being forced to cut spending on other expenses to cover higher loan repayments, while many prospective buyers are avoiding the mortgage market altogether.
Moreover, the end of the Help-to-Buy programme – which stoked demand throughout the pandemic – has squeezed the purchasing power of wannabe homeowners. Two of the nation’s biggest homebuilders last week warned about a collapse in first-time buyer sales, with many renters now unable to escape the spiralling cost of letting.
Still, prospective buyers may take some comfort in both the Conservatives and the Labour Party announcing plans to stimulate the housing market over the holiday weekend. Labour leader Keir Starmer pledged to revive targets for the private sector to build at least 300,000 homes a year, while the Times of London reported that Prime Minister Rishi Sunak is considering a fresh new buyers’ support programme.
In the meantime, cash-strapped first-time buyers are turning to smaller properties in a bid to get on the housing ladder. While three-bed properties remain the most popular option, one-bed and two-bed flats accounted for 30 per cent of first-time buyer interest in the first three months of the year, according to Zoopla, compared with less than 25 per cent in 2022.
At the same time, sellers are starting to accept lower valuations, helping some first-time buyers get deals over the line. One in four available homes has had its asking price knocked down so far this year, the report said.
“The worst of the pricing adjustment in the housing market appears to be behind us,” Zoopla’s Donnell said. Still, “house price growth will slow further over 2023 and dip into negative territory”, he added. BLOOMBERG
Share with us your feedback on BT's products and services
