Latest House Price Index also reveals buyer demand and sales are running above the five-year-average

House prices in England have fallen 1.3% in the last six months according to Zoopla’s latest House Price Index. 

Almost a fifth (18%) of homes currently listed for sale on Zoopla have had the asking price cut by more than 5%, down from 28% in February. 

Despite price decreases and weaker demand than this time last year, the number of sales agreed have reached their highest point in 2023, up 11% on the five-year average.  

Scotland, the North East and London have been the best-performing regions over the past four weeks, with demand and sales running above the five-year average.

Meanwhile, several regions in southern England, where there has been above-average house price growth in recent years, are experiencing a slower market.

Annual house price growth has slowed in key cities including Oxford (+0.1%), Cambridge (+0.3%), Reading (0.8%) and Brighton (+0.8%). 

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“Sellers shouldn’t get carried away by more positive data on the housing market and need to price their homes realistically if they are serious about moving home in 2023,” according to Richard Donnell, Executive Director at Zoopla.  

“Home buyers remain price sensitive with one eye firmly on the outlook for the economy, the cost of living and the trajectory of mortgage rates which appear likely to edge higher in the coming weeks.”

The latest index shows landlords are continuing to leave the market, with more than one in 10 (11%) of homes currently listed for sale on Zoopla having been previously rented out.

This is down from a peak of 14% in 2020 when rents were falling in London and other major cities.

Zoopla House Price Index May 2023 - graph shows regional view on demand and sales agreed

Source: Zoopla House Price Index, May 2023

Around a third of the previously rented out homes listed for sale return to the rental market, are unable to find a buyer, or are bought by another investor. 

The average price of a previously rented home is £190,000, 25% below the average value of an owned home. 

“The market dynamic for sales rebounded much stronger than many had forecast at the start of the year, after a period of inactivity following the government’s Mini Budget,” Guy Gittins, CEO of Foxtons Estate Agents, said in a statement.

Last week, property portal Rightmove reported that house prices increased 1.8% in May, the biggest monthly increase seen this year.