But Zoopla says predicted drop-off less than expected
The number of homes sold in 2023 is on track to fall 23% compared to last year, as the housing market adjusts to higher mortgage rates.
Online property portal Zoopla is expecting home sales in 2023 to fall to one million, down from 1.3m in 2022.
Zoopla’s house price index for October found that house prices have decreased by 1.1% in 2023 while buying power has dropped by 20% due to 5%+ mortgage rates and the cost of living squeeze.
Zoopla said the 1.1% drop in house prices is less than expected.
It said: “House prices have defied predictions of much larger falls in 2023. The economy continues to grow, albeit slowly, while unemployment remains low and incomes are increasing. Lenders are supporting customers to refinance, limiting the number of forced sellers.”
Despite this, first-time buyers are the largest buyer group this year, making up 33% of total sales, closely followed by cash buyers who represent 32% of sales.
The index states that house prices are expected to fall by 2% over 2024.
It adds that for housing affordability to improve, house prices need to fall and incomes need to increase, or mortgage rates, which are “the primary driver of the current overvaluation in home values” need to fall further.
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