Zoopla, a leading property portal, stands by its forecast of an average 2% dip in house prices across the UK this year. This prediction spells trouble particularly for the high-value areas in the South of England, where homeowners are expected to feel the pinch the most. The culprit? Sky-high mortgage rates that continue to hamstring buyers’ purchasing power, especially in these affluent regions. This financial strain is anticipated to drive further drops in home values, leaving many to brace for impact.

Despite the gloomy outlook for some, the report isn’t all bad. Last year, despite a general slump in prices across the UK, a significant number of homeowners saw their property values either hold steady or even climb, with six out of ten enjoying at least a 1% increase. Those lucky enough to witness a rise in their property’s worth enjoyed an average boost of £7,800, equating to a cosy £21 daily bump. However, it’s worth noting that this increase is 60% less than what homeowners gained back in 2022.

Zoopla’s comprehensive review, which compared home value estimates from December 2022 to December 2023, revealed that a noteworthy 3 million homeowners managed to secure a gain of 5% or more over the year. The North West emerged as the star performer, where the average property saw an uplift of £13,200, thanks to 17% of homes in the region (equating to half a million properties) recording value hikes of over 5%.

The type of property also played a significant role in these increases, with terraced houses in the North West being the most likely to appreciate by more than 5%. Scotland followed closely behind, with over 400,000 homes (16%) enjoying a value surge of 5% or more.

The Flip Side

Four in ten UK homes (44%) experienced a drop in value by at least 1%, with nearly a third of properties seeing their worth decrease by more than 5% – a staggering 2.5-fold increase from the previous year. This downturn was especially pronounced in the South of England, where homeowners were more likely to witness a reduction in their property’s estimated value. The East of England and the South East were particularly hard hit, with 18% of homeowners in these areas seeing declines of 5% or more. The average financial blow for these unfortunate property owners was £11,500 in the East and £13,200 in the South East.

Expert Insights

Izabella Lubowiecka, Senior Property Researcher at Zoopla, offered a silver lining amidst the cloud of data: “While national house prices indices pointed to modest house price falls over 2023, our property by property level tracking of home values shows that most homes saw their value unchanged or slightly higher over the year.” She highlighted the geographic disparity in these trends, noting that “Value reductions were focused in southern England while modest gains were recorded in lower priced, more affordable housing markets.”