Homes in 2023: 3 in 5 Homes Increased in Value:

At the onset of 2023, ominous forecasts hinted at a potential 10% decline in home values throughout the year.

Contrary to the pessimistic projections, a remarkable 3 in 5 homeowners witnessed their homes either holding their value or experiencing an increase, with an average uptick of £7,800.

1 in 10 homeowners celebrated a notable surge of 5% or more, equating to an impressive £17,200. However, a contrasting scenario unfolded for 44% of UK homes, which encountered a decline of at least 1%, with one-third witnessing a substantial 5%+ reduction in value from 2022.

A discernible North-South divide shaped the property landscape in 2023. Areas with lower house prices, particularly in the North, demonstrated resilience to higher mortgage rates, leading to increased home values.

Winners and Losers by Region:

North West: Emerged as a leader in value gains, with the highest proportion of homes experiencing a 5%+ increase (£13,200 on average). Terraced homes took the lead, with 19% witnessing significant rises.

Scotland: Noteworthy gains were observed, especially in apartments, where 16% registered a 5%+ value increase.

North East and Yorkshire: Jointly secured the third position, with 1 in 7 homes exhibiting a 5%+ value rise. Flats in the North East and terraced homes in Yorkshire stood out as winners.

Preferred Property Types:

In 2023, the stalwarts of the housing market—semi-detached homes and terraces—proved resilient in holding their value. Homes perceived as good value for money attracted buyer interest, contributing to robust price performance. Larger value gains of 5%+ were evenly dispersed across property types.

Property Types and Value Trends:

• Detached Houses: Faced the highest likelihood of value loss in the East of England (23%).

• Apartments (South East): Experienced the most significant losses, with 25% witnessing declines.

Stringent mortgage regulations introduced in 2015 played a pivotal role in preventing homes from being overvalued, averting potential property market crashes. The regulations compelled lenders to ensure borrowers could meet higher interest rates, shielding against forced sales.

2024 Outlook: Zoopla's prediction foresees modest house price falls of 2% across the UK in 2024. Regional and property-type variations will persist, with higher mortgage rates impacting buying power, particularly in high-value regions in the South. Flats and detached homes in these areas may see further value declines, emphasizing the importance of setting realistic prices. Conversely, popular and value-driven property types are expected to maintain or increase in value.

Written by Veera Josey, 3rd February 2024

Sources: Zoopla, BBC News and Land Registry