More than two in five homeowners saw the value of their property fall last year, according to the latest analysis by Zoopla.
The property website says 13 per cent of homes fell in value by 5 per cent or more in 2023, while a further 31 per cent fell in value by between 1 and 5 per cent.
In contrast, there were some areas of the country where almost a fifth of homeowners saw their house price rise by more than 5 per cent.
We look at the house price winners and losers of 2023.
South coast falls: Half of homeowners in the seaside towns of Dover and Hastings registering a 5% home value decline in 2023
Where are house prices falling – or growing slower?
The falls have been felt more in the South of England with 18 per cent of homeowners in the South East seeing their homes fall in value by 5 per cent or more.
Zoopla says it has noticed that housing markets close to rural and coastal areas in the south East have cooled since the pandemic boom.
More than half of homeowners in the seaside towns of Dover and Hastings will have seen a 5 per cent home value decline in 2023, for example.
However, while the average UK house price moved lower over 2023, the nation’s 30 million homes are spread across thousands of housing markets, each with its own characteristics and drivers.
More than a third of homeowners saw their home increase in value, according to Zoopla’s analysis.
In fact, one in 10 homeowners would have seen their house price rise by 5 per cent or more in 2023. That equates to three million households.
However, the overall gains by those households that did rise in value last year were significantly less than in the previous year.
It says the average annual gain made by homeowners whose properties rose in value, was £7,800 last year – a big drop from the £19,700 recorded in 2022.
Where are house prices going up?
Zoopla noted a clear north-south divide in the fortunes of homeowners in 2023 as lower prices cushioned the impact of higher mortgage rates in more affordable parts of the country.
As a result, it says more homes actually registered increased values in northern Britain.
Defying expectations: More than half of homeowners saw the value of their home remain static or increase by at least 1%
Last year, the North West had the highest proportion of homes rising in value by 5 per cent or more.
Zoopla says that half a million homes (17 per cent of houses) in the region recorded gains of over 5 per cent or more.
The North West was closely followed by Scotland, where 16 per cent of homes increased in value by 5 per cent or more in 2023.
Izabella Lubowiecka, senior property researcher at Zoopla says: ‘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.’
Homeowners in South of England were most likely to see reductions in their home value with 18% of homeowners registering home value decreases of 5% or more
Rossendale is hottest property market
One local area in particular bucked the typical housing market trend in 2023 – one of prices predominantly falling or stagnating.
The borough of Rossendale in the North West of England was rated as the hottest property market of 2023 by Zoopla, with the highest concentration of homes increasing in value by 5 per cent or more of any local authority.
Some 44.2 per cent of homes have risen in value by 5 per cent or more in that area, according to Zoopla’s data.
Rossendale is situated in East Lancashire, bordering Bury, Hyndburn, Burnley, Todmorden and Rochdale.
On the up: 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, according to Zoopla
Graham Shuttleworth, manager at Ryder & Dutton estate agents in the town of Rawtenstall, which is based in the Rossendale borough, says the area is benefitting from the house price ripple effect coming out of Manchester as well as millions of pounds of investment coming into the area from the government’s levelling up scheme.
‘There are three really exciting market towns that are driving growth in Rossendale. Rawtenstall, Haslingden and Bacup. All are great places to live and within easy commuting distance of Manchester city centre.
It’s a perfect destination for all ages who want to move out of the city centre but stay close by
Rossendale estate agent, Graham Shuttleworth
‘We are based in Rawtenstall and the place just keeps improving with increasing numbers of trendy bars, shops, craft breweries and restaurants opening up.
‘If you miss the traffic it takes 20 minutes to drive into Manchester and otherwise it’s 45 mins in rush hour, via the convenient M66 link.
‘So it’s a perfect destination for all ages who want to move out of the city centre but stay close by. The area has become really popular for families.
‘There is also a massive amount of regeneration coming into some of the town centre redevelopments in the area linked to government levelling up funding.
‘Haslingden Market town centre is being redesigned while similar multi million pound projects are underway in Bacup and Rawtenstall.’
Other local areas that saw roughly a third of homes increase in value by 5 per cent or more include Blackburn with Darwen in the North West of England and Telford and Wrekin in the West Midlands.
What next for house prices?
Zoopla is predicting modest house price falls of 2 per cent in 2024 across the UK.
However, as shown, exactly how this affects individual homeowners will depend on their location.
Zoopla expects those who saw home value growth in 2023 to see similar increases in 2024.
It says 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.
This is particularly true for those who own a flat or detached home in the South, who Zoopla advises should continue to price realistically in order to complete a sale.
However, while Zoopla is predicting more of the same in 2024, the property agent Hamptons is reporting that the housing market has turned a corner.
In January, sellers were less likely to cut their asking price than at any time over the last eight months, according to Hamptons.
It revealed that 48 per cent of homes sold in January across England and Wales had been subject to a price reduction, down from a peak of 55 per cent in October 2023.
Over a quarter of these homes sold above their final asking price, the highest share since October 2022.
Hamptons also reported that with more buyers around, new homes coming onto the market are selling quicker than they were last year.
It said 9 per cent of homes that came onto the market in January sold within a week, up from 6 per cent in January 2023.
However, given that many buyers and sellers are still trying to adjust to the market, this figure remains considerably lower than in January 2021 when 19 per cent of homes sold within a week.
Aneisha Beveridge, head of research at Hamptons, believes the early signs in 2024 suggest that the market has firmly turned the page.
‘Falling mortgage rates have been the primary catalyst, tempting last year’s missing movers to restart their property search,’ says Beveridge.
‘Consequently, more households were looking to buy last month than in any January over the last decade, including the start of both 2021 and 2022.
‘First-time buyers and second steppers, who tend to be most reliant on mortgage finance, are at the forefront of the recovery.
‘This injection of demand is starting to stabilise house price falls, particularly for mid to lower-priced homes, which should also improve selling conditions further up the chain as the year progresses.
‘That said, the affordability picture is still more challenging than it was a few years ago which will keep a tight lid on price growth.’
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