The pandemic-driven rush to rural and coastal living is fading, with affordable towns now drawing more interest, property website Zoopla has reported. Demand for larger homes in remote areas surged during lockdowns as remote working took hold, but this trend has lost momentum.
Higher mortgage rates are squeezing buyer budgets, forcing a shift towards cheaper urban markets, Zoopla said. Nationwide and Halifax have forecast UK house prices will fall next year by 5% and 8% respectively, with the steepest drops expected in the most expensive areas.
Richard Donnell, Zoopla's executive director of research, noted that London and the South East are likely to see the biggest price falls, while more affordable regions in the North, Midlands, and rural Wales should be more resilient. “House prices are going to come under the most pressure in the most expensive markets,” he said.
Zoopla's data showed above-average demand in towns such as Bradford, Swindon, Coventry, Crewe, Southend and Milton Keynes. Meanwhile, Rightmove reported that London has regained its position as the most searched-for area on its platform, overtaking Cornwall which had led during the pandemic.
Analysts predict 2023 will bring falling prices and fewer transactions, though a “soft landing” is possible, according to Nationwide's chief economist Robert Gardner. Iain McKenzie of The Guild of Property Professionals added that price readjustments could spur buyer interest.
