Property demand halves as ‘race for space’ ends -...

Property demand has halved but the slowdown is focused on the previously popular rural and coastal areas, Zoopla has revealed.

Higher mortgage rates, cost of living pressures and low consumer confidence hit price growth and demand in November, Zoopla said.

The portal has revealed that buyer demand is down 50% annually and new sales agreed are 28% lower while sellers continue to accept larger discounts to asking prices to achieve sales.

The gap has grown to 4% in the last month, down from zero percent in early October, according to the property website’s latest House Price Index.

While the pandemic saw people moving from urban areas in a “search for space,” Zoopla suggests this trend may have run out of steam.

This has hit demand in rural and coastal towns particularly in the south of England including East Kent where demand was down 0.5%, mid-Wales where it fell 10% and the Lake District area where it was down 5% year to date compared with the five-year average.

Buyer interest in affordable, accessible urban areas is holding up much better in contrast, according to the research.

Levels of demand, compared to the five year average, were strongest in Bradford (61%), Swindon (57%), Coventry (47%), Crewe (47%), Southend (47%) and Milton Keynes (45%).

Richard Donnell, executive director at Zoopla, said: “2022 has been a strong year for the housing market with the second strongest year for sales in more than a decade at 1.3m. The fallout from the mini budget, with mortgage rates hitting 6.5%, brought the market to a near standstill in the last quarter.

“We expect buyers to return to the market in the new year, but they will be far more cautious and price sensitive. Serious sellers need to be realistic on price and get the advice of an agent on how to market their home. While mortgage rates will start 2023 lower, the impact on pricing will be felt more in the higher value markets of southern England than the more affordable markets elsewhere.“