House prices are widely predicted to fall next year, with drops of around 5% anticipated1. As mortgage rates rise, dampening demand and supply increases mean that prices are projected to fall.
Buyer demand has dropped by a third since the September ‘mini-budget’ when mortgage rates rose sharply. On the supply side, meanwhile, more homes are coming onto the market, with stock up 40% compared to 2021.
All this is already causing prices to fall, with data showing typical sellers are having to settle for 3% below asking price. Almost 7% of homes have seen reductions of at least 5%.
Southern England, where prices have risen most in the past decade, have so far seen the greatest reductions in asking price. One in three homes in the South East and East of England have seen asking price reductions.