10 areas in UK where house prices are predicted to fall the most
Rutland is reported to have seen the steepest drop in prices across the UK
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Your support makes all the difference.UK house prices are widely predicted to take a tumble in the face of spiralling mortgage rates and rising rental prices, but new research shows the fall is likely to be sharper in some areas more than others.
With a deep, long recession on the horizon, the impact of stalled demand for sky-high mortgage approvals, following the disastrous Liz Truss-Kwasi Kwarteng mini-Budget in September, is beginning to put pressure on buyer demand in the property market.
New figures from house seller advice service PropCast shows demand has fallen sharply in 10 UK counties, which could pave the way for a more dramatic slump in house prices in these regions.
Topping its list is the East Midlands county of Rutland, which according to Rightmove had an overall average property price of £371,511 in the past year, compared to the nationwide average of £296,000.
Data shows that England’s smallest county saw demand plummet by 19 per cent between August and November this year. Neighbouring Leicestershire, where demand fell by 17 per cent, was pipped to second place by Herefordshire, which PropCast said saw interest drop by 18 per cent.
PropCast measures buyer demand and has looked at the percentage of properties for sale that are under offer or subject to contract in November 2022 compared to September.
It comes after UK inflation reached a 41-year-high of 11.1 per cent on Wednesday. The latest Consumer Price Index (CPI) figure is the highest since October 1981 and marks a full percentage point rise last month, nearly double what economists had expected.
PropCast’s predictions join a host of gloomy projections for Britain’s housing market. Nationwide said the average house price fell by 0.9 per cent in October from September to £268,282, while Halifax reported a 0.4 per cent monthly drop in value.
Elsewhere, the Royal Institution of Chartered Surveyors recently reported a slowing in house price growth after a two-year boom.
It comes as the latest house price data published by HM Land Registry (HMLR) for September 2022 show that average house prices in the UK increased by 9.5 per cent in the year to September 2022. This was down from 13.1 per cent in the year to August 2022.
And it seems further decline is to come, with the Bank of England recording a drop in mortgage approvals from 74,400 in August to 66,800 in September.
Savills and Knight Frank estate agents has forecast housing prices will fall by 10 per cent, while research consultants Oxford Economics expects a 12 per cent drop.
Gavin Brazg, founder of PropCast said: “Although all counties are still in a sellers’ market, we are seeing big drops in demand, pushing those locations further towards a buyers’ market.
“More properties are also coming to market. This re-balance means the balance of power is slowly shifting towards buyers, which will mean house prices will stabilise and potentially even fall.
“This means it’s more important than ever before for sellers to remain realistic about what their home is worth, and choose a good local estate agent who will implement an optimal pricing and marketing strategy. Otherwise, they will find their home will struggle to sell.
“Whilst for buyers, they may be able to negotiate on price a bit more - something that hasn’t really been possible over the last two and half years.
“This can help ease the burden of increased mortgage repayments, as can any stamp duty saving. However, demand is still out there, so buyers need to make sure they are ready to move when they’re making their offer. This means having the funds organised, solicitors appointed and all the paperwork in place.”
Here are the 0 counties PropCast says have seen the most significant drop in buyer demand:
- Rutland – 19 per cent
- Herefordshire – 18 per cent
- Leicestershire – 17 per cent
- Powys – 17 per cent
- West Glamorgan – 17 per cent
- Lincolnshire – 17 per cent
- East Riding of Yorkshire – 17 per cent
- Mid Glamorgan – 16 per cent
- South Glamorgan – 16 per cent
- North Yorkshire –16 per cent
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