Zoopla: Southern England will be worst hit by house price decline

Zoopla is holding onto its predictions of a 2% average house price drop this year and said high- value regions in the South of England will be worst hit.

Research from the portal suggests high mortgage rates will continue to limit buying power and will be most felt in high-value regions in the South of England, contributing to further home value drops. 

It comes as analysis by Zoopla found that while prices dropped across the UK last year,  six in 10 homeowners saw the value of their home remain static or increase by at least 1%

Those who saw their property increase in value in 2023 enjoyed an average increase of £7,800 - or £21 per day. This is 60% lower than those who saw a gain in 2022.

Comparing home value estimates for every UK home from December 2022 to December 2023, Zoopla found that 3m homeowners even made a gain of 5% or more over the course of the year. 

In 2023, the North West had the highest proportion of homes registering larger value increases of 5% or more - an average of £13,200 gained - as half a million homes (17% of houses) in the region recorded gains of over 5%. 

Property type has also had an impact on increased home values, with terraced homes in the region most likely to register more than 5% value increases (19%).  

The North West is followed by Scotland, where 16% (just over 400,000) homes increased in value by 5% or more in 2023. 

Despite many homeowners in the UK experiencing value increases during 2023, four in 10 (44%) of UK homes fell in value by at least 1%, with almost a third of homes falling in value by over 5% or more - a 2.5 times increase on the previous year. 

This has been felt more in the South of England as homeowners in this region were most likely to see reductions in their home value estimates in 2023 with 18% of homeowners in the East of England and the South East registering home value decreases of 5% or more. The average loss for this group of homeowners in the East of England was £11,500, while those in the South East lost an average of £13,200.

Commenting on the analysis, Izabella Lubowiecka, Senior Property Researcher at Zoopla said: “While national house prices indices pointed to modest house price falls over 2023, our property by property level tracking of home values shows that most homes saw their value unchanged or slightly higher over the year. Value reductions were focused in southern England while modest gains were recorded in lower priced, more affordable housing markets."