The housing market in 2023 saw a mixed bag of outcomes, with over two in five homeowners experiencing a decline in property value, according to Zoopla's latest analysis. While 44% of UK
properties faced a decrease in house prices, a significant portion of homeowners witnessed an increase in the value of their homes. Let's delve into the winners and losers of the house price landscape in 2023.
Declining Values: The South Bears the Brunt
The decline in house prices was more pronounced in the South of England, with 18% of homeowners in the South East witnessing a drop in property value by 5% or more. Coastal and rural areas in the region, such as Dover and Hastings, were particularly affected, with over half of homeowners experiencing a 5% decline in home value. The cooling of housing markets in these areas post-pandemic contributed to the downward trend.
On the other hand, more than a third of homeowners nationwide saw an increase in their home's value. Although the gains were less substantial compared to previous years, with an average annual gain of £7,800, one in ten homeowners witnessed a rise of 5% or more in property value.
North-South Divide: Contrasting Fortunes
Zoopla observed a clear north-south divide in house price trends, with northern regions outperforming their southern counterparts. In the North West, half a million homes saw an increase in value by 5% or more, making it the region with the highest proportion of homes experiencing significant gains. Scotland followed closely, with 16% of homes registering a similar rise in value.
Rossendale Emerges as a Property Hotspot
Amidst the overall downturn in house prices, the borough of Rossendale in the North West stood out as a property hotspot. Zoopla rated it as the top-performing property market of 2023, with 44.2% of homes witnessing a value increase of 5% or more. The region benefited from Manchester's housing market ripple effect and government investment through the levelling-up scheme.
Looking Ahead: Market Predictions and Trends
Zoopla forecasts a modest 2% decrease in house prices across the UK in 2024, with high mortgage rates expected to impact regions with higher property values more significantly. However, the market dynamics may vary based on location, with areas that experienced growth in 2023 likely to see similar trends continue.
In contrast, Hamptons reports a positive shift in the housing market, indicating that the market has turned a corner. Falling mortgage rates have spurred demand, leading to a decrease in price reductions and an increase in homes sold above asking price. The injection of demand, particularly from first-time buyers and second steppers, is expected to stabilize house price falls and improve selling conditions in the coming months.
As the year progresses, the housing market will continue to evolve, influenced by factors such as affordability, mortgage rates, and government policies.