According to new data from major UK real estate companies published for 2022, in recent months, British homeowners have been forced to sell their property at a price below the asking price.
Real estate portals report that the real estate market is slowing down, with demand for houmes down 44% and sellers accepting offers 3% below the asking price.
More apartments and houses are entering the UK property market, with the total stock available up 40% year-over-year, but still nearly 20% below pre-pandemic levels.
In 2022, more and more people selling their homes have to settle for a lesser offer from buyers. Statistics show a price decrease at the time of the final transaction by about 3%, while prices either met the seller’s request or even exceeded it in 2021 and even in the first quarter of 2022. Moreover, a further drop in house price by about 5% next year is predicted, and as a result, more discounts.
Since the beginning of September, the original asking price of every ninth residential property has been reduced by five percent or more. According to October statistics, closing contract amounts were reduced to some extent in more than a quarter of transactions.
Real estate agents report that the biggest drop in asking prices is in the south of England, where sales have fallen the most, with nearly one in three homes in the southeast and east of England being sold for less than planned to attract buyers.
Annual house price growth slowed to 7.8% in October from 8.1% in September and is the lowest since November 2021. Demand fell 44% after Kwasi Kwarteng’s catastrophic mini-budget September, when mortgage rates soared, causing hundreds of deals to be stopped and frozen.
Sales fell nearly 50% in previously hot spots in the real estate market and in areas where higher mortgage rates will hit purchasing power the hardest – southern England, East Midlands and Wales. Sales fell less in more affordable areas and in London, where market conditions were weaker. Analysts expect mortgage rates to fall to around 5% at the end of the year for two-year and five-year fixed contracts.
Under the financial and economic crisis, reducing household spending on essential goods and a protracted recession predicted by the Central Bank of England, the housing market is projected to continue to slow down and prices are likely to decline in the first half of 2023. Real estate values are expected to decline by 5% for the year as a whole, with sales volumes falling to 1 million from 1.3 million this year.
The real estate market is adjusting to lower mortgage rates, but still the likelihood that the price of housing will fall by more than 10% on average in the UK remains low.
Despite the fact that the prospects for the housing market are not the most positive at the moment, experts are confident that demand will still be maintained at a certain level. The ongoing effects of the pandemic, increased labor market flexibility, and more retirements will encourage relocation. The rising cost of living will only support these trends, prompting homeowners to consider their next move.
