The worst property price falls may have already happened, according to Zoopla.
The firm expects prices to fall by a negligible 1% from now until the end of 2023.
The proportion of properties on the market seeing price cuts has dropped to 24%, while buyer demand reached its highest level so far this year after Easter – it’s now 14% higher than 2019.
Sarah Coles, head of personal finance, Hargreaves Lansdown, said: “Buyer demand is lower than this time last year, but at that point there was an awful lot of frustrated demand because of the property drought. A better balance of supply and demand means would-be buyers are more likely to be able to find something they want. It’s why Zoopla sales were 10% ahead of the five-year average after Easter.
“A healthy dose of realism is also easing the sales process. Sellers are being more pragmatic about pricing from the outset, with just under a quarter needing to cut the price after coming to the market with too much optimism. Buyers are also prepared to compromise. Although three-bedroom properties remain the most commonly bought property among first time buyers, we’ve seen a real growth in sales of two-bedroom properties too.
“However, it’s worth putting this in the context of other measures. Annual price rises are similar to yesterday’s Nationwide figures for April, but figures for demand are strikingly different to the RICS survey for March. That one showed buyer demand, sales and house prices were down yet again. And while we don’t yet know whether this turned around in April – it would be a massive reversal of trends that have settled in for months. It may mean these positive signs aren’t replicated across the market.”
Coles added: “First time buyers are helping to prop up the market. Runaway rents are up 11% in a year, and the number of rental properties has collapsed, so rent hikes are far from over. The prospect of rents becoming an ever-increasing burden is pushing people into becoming first time buyers.”
“Renters are also likely to place higher value on being able to fix a mortgage, so they’ll know what they’ll pay over the next few years. Where they’ve been forced to move by a landlord who is putting the house up for sale, they’ll also be drawn by the prospect of being in control of deciding when they next move home.”
First time buyers with a mortgage made up one in three sales (34%) in 2022.
This was ahead of home movers buying with a mortgage – at 31%.
