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Bloomberg
The number of UK house sales fell in May, the latest sign that the red-hot property market is starting to cool.
Sales agreed in May were down 13% year-on-year, according to Zoopla’s UK House Price Index report. The average time to agree a sale is also rising — taking 22 days in May, from 20 days in March.
“There are signals that the impetus in the market is slowing, and more price sensitivity in the market will spell a slowdown in price growth during the remainder of 2022,†Grainne Gilmore, Zoopla’s head of research, said in the report.
Zoopla also said house price growth in May was the lowest since December 2019, with average values up just 0.1%. It follows data from Nationwide Building Society that showed prices grew 0.3% in June.
However, other signs point to more robust activity in recent months. Figures from the Bank of England showed lending was at the highest level in eight months in May, despite an increase in the effective interest rate on new mortgages. Banks approved 66,200 home loans, slightly higher than in April and above economists’ estimates for a decline to 64,000.
The market is starting to feel the impact of rising interest rates that will make borrowing more costly, while the pandemic-driven rush for space starts to recede. The level of buyer demand, while still high compared to the five-year average, is beginning to return to more normal levels, according to Zoopla.
“As the pressure on supply from buyer demand starts to ease, it will put a brake on the intense upwards pressure on pricing,†the Zoopla report said.