More than half of Britain’s homes fell in value in the final three months of last year, as high borrowing costs and spiraling inflation weighed on the housing market.
(Bloomberg) — More than half of Britain’s homes fell in value in the final three months of last year, as high borrowing costs and spiraling inflation weighed on the housing market.
Almost 16 million of the nation’s 30 million homes lost an average of £3,900 ($4,809) in value between October and December, according to a report from property portal Zoopla. That’s a sharp increase on the 2.3 million homes that decreased in value over the course of 2022 as a whole, highlighting the impact of borrowing costs that shot up in the final months of the year.
In the second half of the year, over one million homes lost the gains achieved between Feb. 2020 and Feb. 2022 when the pandemic drove a boom in house prices. Almost a third of those homes are in London, according to the report, reflecting a wider slowdown in markets where price gains were modest during the pandemic.
“Gains have started to be eroded in the final half of 2022,” said Richard Donnell, executive director at Zoopla. “Buyer demand weakened in the face of higher mortgage rates and weaker growth in household incomes.”
Still, 92% of Britain’s homeowners saw the value of their properties rise by an average of £19,000 over the course of last year, and many of the fallers will be cushioned by the Covid-driven price gains. The total value of the UK housing market increased by £700 billion to £10.5 trillion in 2022, the report added.
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