UK’s One Third Of Homes Lose Value
In the past six months, more than 11.1 million UK homes, accounting for a third of all residential properties, have seen their values drop by at least 1%, according to a recent report from property website Zoopla. This downward shift has wiped a hefty £85m off the overall UK housing market, with each affected property seeing an average decline of £7,700. The report notes that UK homes are nearly evenly split between those increasing in value (32%), those stagnant in value (30%), and those losing value (38%) in the past half-year. Larger properties such as detached homes and bungalows are bearing the brunt of this downward trend. Notably, 43% of detached homes and 70% of bungalows have experienced a fall of more than 1% in value since last November. Geographically, home values in the South of England, Scotland, and Northern Ireland have been hit the hardest. Certain coastal areas in the South of England, such as Brighton, Norfolk, and Southend-on-Sea, have seen property values decrease in over 65% of homes. Among the top 10 locations witnessing the steepest value declines are West Central London, with 68% of homes shedding an average of £13,000 since November 2022, and the East of England’s Colchester, where 67% of properties (109,000 homes) have lost over 1% in value in the last six months. Although declining home values may present an opportunity for potential buyers to snag a bargain, Zoopla cautions buyers to consider the risk of negative equity and the impact of higher mortgage rates. The report forecasts a 5% decline in house prices throughout 2023, but notes that negative equity is unlikely for those with a loan-to-value ratio lower than 95%. Furthermore, while higher mortgage rates may be a deterrent for some, Adrian Anderson from property finance specialists Anderson Harris suggests that purchasing a property at a lower price with a more expensive mortgage in the short term could be a viable strategy, provided the buyer can comfortably afford the repayments. Zoopla’s Value of Housing report tracks the values of 29 million homes across the UK, providing insights into the shifting dynamics of the property market, regardless of whether the properties are currently on the market.
Tags : UK homes residential properties values housing market property homes bungalows South of England Scotland Northern Ireland