Growth slows to 3%, ‘worst house price falls behind us’: Zoopla  

UK house price annual growth slowed again to 3% in April to £259,700 for an average home, data from Zoopla shows, but adds that the “worst of the monthly house price falls is now behind us”.

Last month prices rose at 4.1% on an annual basis, while a year ago homebuying inflation was 9.3%, says the property website’s latest House Price Index.

It says that “prices are continuing to register modest quarter-on-quarter price falls of up to 0.7% across all regions and countries of the UK.

“There are early signs that the level of monthly price reductions are now reducing and the main adjustment in pricing is behind us.”

The report adds that prices are likely to register low negative annual growth by the summer and end the year falling by 1%, in what it calls “a soft landing for the market”.

It says demand for homes hit their highest level this year after the Easter break and is 14% higher than 2019 levels but still 42% down on a year ago — as the market surged in 2022 on the back of a lack of supply, the post-pandemic ‘race for space and lower mortgage rates at the start of the year.

However, the study adds that the stock of “homes for sale continues to expand and is now 66% higher than a year ago”.

First-time buyers remain a “resilient” part of the market accounting for 34% of all sales last year, the report says.

They remain key buyers despite higher mortgage rates, in part because of “steep increases in rental costs”, which jumped 11% or £1,120 over the last year.

The study points out that the rapid growth in house prices over the last three years means the household income to buy a three-bed FTB home has increased by an average of £7,530 to a required household income of £55,900.

The increase for two-bed homes is lower, up £4,900 to an income of £51,000. The deposit to buy a three-bed FTB home has risen by £4,650 to £34,500 while for a two-bed home is £3,000 higher at £31,500.

But the report says “transaction volumes continue to grow. The housing market is arguably more balanced between supply and demand than it has been for some years.”

It points out that “a range of demographic and social factors continue to motivate households to move home”, forecasting that there could be 1.1 million sales in 2023, “which would be a very positive outcome”.