Home prices are registering the lowest monthly rate of growth since 2019, Zoopla says

Real estate prices rose at the lowest monthly rate since 2019 in May, according to Zoopla, as the economic outlook and a higher base price began to “affect sentiment and activity.”

Prices rose 0.1 percent during the month, the smallest monthly increase since December 2019, according to the real estate portal’s House Price Index.

In the year ending in May, home values ​​rose 8.4 percent, compared to 9.2 percent in the year through April.

Year-over-year growth: Zoopla said home prices increased 8.4% in the 12 months to May

On a quarterly basis, prices rose by 1.4 per cent, the slowest since March 2021. The typical home now sells for £251,550.

Zoopla predicted that while levels of real estate price growth will decline for the rest of the year, housing prices will not.

It estimated that prices would grow 3 per cent in the year to December 2022.

“We expect price growth to start to moderate, reflecting the fact that buyer demand is starting to return to normal from record highs, although it is important to highlight that demand levels are still 30 per cent above the five-year average. years,” he said.

“The economic outlook, and multiple hikes in the base rate, will drag on sentiment and activity as we move through the rest of the year.”

While Zoopla said demand for real estate remains high compared to its five-year average, it said it has begun to ebb to “more normal levels.”

It reported that the average time to sell a home, from listing to agreed sale, rose from 20 days in March to 22 days in May.

Declining Demand: While buyer appetite is still above the five-year average, it is declining

Declining Demand: While buyer appetite is still above the five-year average, it is declining

Zoopla said the softening in demand was due in part to an increase in mortgage rates after successive increases in the Bank of England’s key interest rate.

Buyers now face average rates of 3.37 percent for a five-year fixed-rate loan, according to Moneyfacts, compared to 2.64 percent in December 2021.

This would increase the annual cost of a mid-price home loan (£250,000) with 25 per cent deposit and 25 years to £870, Zoopla said.

‘Buyer demand remains strong in the housing market, but there are signs the momentum may be waning, so those wanting to make a move should check their options sooner rather than later,’ said Gráinne Gilmore, Head of Research at Zoopla.

“Plus, mortgage rates are likely to continue to rise, so keeping the interest rate close can save hundreds in the long run.”

Top of the table: Zoopla said Wales saw the biggest growth in house prices at 11.4%

Top of the table: Zoopla said Wales saw the biggest growth in house prices at 11.4%

Wales leads price growth while London lags behind

Wales had the most price growth, according to Zoopla, with prices rising 11.4 percent over the year, while London saw the least growth at 3.9 percent. This was similar to yesterday’s Nationwide report.

Of the UK’s largest cities, Nottingham had the highest rate of price growth in the year to May at 10.4 per cent, raising the average home value to £190,300.

Bournemouth followed at 10.2 per cent. Dorset overtook Hastings as the southern coastal area with the fastest rate of house price growth.

The fastest-moving market is the Southwest, Zoopla said, with the average time between listing a home and being approved for sale in less than three weeks (19 days).

“It’s not surprising to see the Southwest market going against the tide,” said Nick Lemming, president of Jackson-Stops real estate agent chain.

Our Exeter office saw a 40 per cent increase in buyer inquiries in May, significantly exceeding the level of instructions there. This has allowed some sellers to be more optimistic in their bids – prompting competitive bids and testing buyers’ agility to make a quick move.

But Zoopla also said buyer demand for homes in the Southwest saw the biggest drop over the past month, down 14 percent — though still 37 percent higher than the five-year average.

Homes in London stay on the market longer, with an average of 35 days between listing and the sale being agreed.

Zoopla expected home prices to grow, on average, 3% in the year through December

Zoopla expected home prices to grow, on average, 3% in the year through December

“I think we’ll look back and note the first quarter of 2022 as the absolute peak of post-pandemic enthusiasm, with an incredible amount of pent-up momentum,” Limming added.

But the trampling on buyers’ shoulders that we saw is unlikely to continue. It is now clear that April will be seen as an inflection point for the market.

We are already seeing many aspiring sellers return to the realms of reality.

A summer market is likely to be a feature of a more stable future. What we’re seeing is more supply coming into the market in most areas, partly in the belief that house prices have peaked, but also to secure better mortgage rates as the era of super-cheap money draws to a close.

Best mortgage rates and how to find them

Mortgage rates skyrocketed as the Bank of England’s base rate rose rapidly.

If you are looking to buy your first home, move or remortgage, or are a buy-to-let owner, it is important to get good mortgage advice from a broker who can help you find the best deal.

To help our readers find the best mortgage, This is Money has partnered with an independent, no-fee L&C broker.

The Mortgage Calculator backed by L&C allows you to filter deals to see which ones fit your home value and deposit level.

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Use the tool at the link below to compare the best deals, factoring in fees and prices. You can also start an online application on your own time and save it as you move forward.

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