Whilst year-on-year house price growth in the UK remains at 7.2%, quarter-on-quarter price falls are expected in the first half of 2023 as the quarterly growth rate more than halves from over 2% per quarter in H1 2022, to 0.3% today, according to Zoopla.

Cost of living pressures and higher mortgage rates means the demand for homes is down by 50% as buyers hold out to see what the market holds in January and early 2023.

The number of sales being agreed are holding up better, down just over a quarter (28%) year on year, however many sellers are having to accept bigger discounts (4% off initial asking prices in November on average) to achieve a sale. Despite this, average UK house prices increased by £17,500 in the last 12 months, although Zoopla expects prices to fall by up to 5% in 2023. Whilst buyer interest has fallen sharply, committed buyers still remain in the market.

The pandemic saw people moving from urban areas in a ‘search for space’, afforded by the onset of more flexible hybrid working and a big increase in retirement by older workers. Many buyers relocated to rural and coastal areas across the UK, pushing up house prices in the South West, Wales, Kent and Norfolk.

However, this flight to rural and coastal areas has run out of steam as demand and sales volumes have weakened in these areas as pent-up demand fades in the face of higher prices and ongoing economic uncertainty. This has hit demand in rural and coastal towns in the south of England - East Kent (-0.5%) and Torquay (+0.4%) - as well as the wider Lake District area (the Lancaster postal area) (-5%) and Mid Wales (the Shrewsbury postal area), which is down by 10%. All of these areas recorded a greater slowdown in demand and sales over 2022 than the national average.