Zoopla: the storm before the calm – Hargreaves Lansdown analysis
Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, comments on Zoopla’s latest assessment of the housing market, analysing the status as the storm before the calm.
Key points:
- Zoopla put the average house price at £244,100 in January, up 7.8% in a year.
- This is down from 8% in December, and the three-monthly rise is at its lowest since August 2020.
- Part of this was because there were more properties on the market – 5% more than the five-year average – which meant more choice for buyers and fewer bidding wars.
Sarah Coles says:
“The housing market was a flurry of activity in January and February, with a surge of sellers hammering in a new For Sale sign and desperate buyers snapping them up sharpish. It was the busiest start to the year in six years, but it’s unlikely to last.
“The New Year saw a surge of sellers keen to make a new start. There’s a good chance that some of this was driven by the rate rise in December, and the worry that if they didn’t hurry up and make a move, they’d end up paying much more for a mortgage on their new home a few months down the line. Buyers, meanwhile, have been desperately waiting for new stock, so were poised to snap them up. Half of the homes on which sales were agreed were snapped up within three weeks.
“But this is likely to be a short-lived phenomenon, because buyers are coming under increasing pressure. Even if they decide they can take the interest rate rises in December and February on the chin, rising prices may be enough to cool their enthusiasm. With much higher energy bills hitting the nation’s doormats, the cost of filling up at the forecourt soaring, and higher prices on everything from food to furniture, there will come a time when a bigger mortgage feels like a step too far.
“The war between Russia and Ukraine will have a major impact too, both on sentiment and on pushing these prices even higher. It could be the final burden that buyers decide they can’t bear, which calms the January flurry to barely a flutter as we go further into 2022.”
Kindly shared by Hargreaves Lansdown
Main photo courtesy of Pixabay
