House prices could fall by double digits in Wales after demand plummets following mini budget
House prices could fall by double digits in Wales next year after buyer demand slumped by a third following the UK Government’s disastrous mini-budget, estate agents Zoopla have said.
A 10% fall in house prices in Wales would however only take prices back to where they were this time last year, after the country saw the fastest house price growth across the nations of the UK during the Covid pandemic.
House price growth in Wales has slowed over the past few months but is still at 10% year on year compared with just over 13% in June and March.
Zoopla said that a 10% slump in Welsh house prices would take them back 12 months to September of last year, while a 15% would take them back to June of last year.
Demand among prospective property buyers had slumped by 33 per cent across the nations of the UK since the mini-budget but it would be 2023 before that was reflected in falling house prices, they said.
They advised that if mortgage rates slip back to around 4% next year, then the UK as a whole could be left facing a “modest” 5% drop in average property prices. But if mortgage rates linger around 6%, then the UK would experience “double-digit” house price falls in 2023.
“The outlook for the year ahead hinges on the trajectory for mortgage rates which impacts the buying power of households who are already facing higher living costs,” Richard Donnell, the executive director at Zoopla, said.
“Mortgage rates were always heading for 4-5 per cent and the impact of the mini-budget has boosted them even higher.
“We expect borrowing costs to fall in 2023 easing some of the hit to buying power, but we also expect a degree of price adjustment in the face of price-sensitive demand.
“House prices have risen significantly over the pandemic and homeowners wanting to sell in 2023 will need to be realistic on price and may have to forgo some of the pandemic price gains to achieve a sale.”
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