The average UK property price rose to £250,200 ($315,400) for the first time in April despite signs of a market slowdown emerging, new data has shown.
According to the latest House Price Index from Zoopla, this was up an average of 8.4% on the year but down from 9% in March.
The real estate company said the rate of house price growth was starting to slow and is expected to hit 3% by the end of the year as homeowners face mounting pressure on their finances thanks to the surge in the cost of living.
Rising house prices coupled with increased interest rates mean the cost of repayments for a new mortgage for an average UK home has risen by £71 a month, equating to £852 a year since the start of the pandemic. This is adding to the already sharp squeeze consumers are facing.
The data revealed that sales are taking longer too, with nearly all types of property taking a few days more to achieve a sale agreed compared to the month before.
Outside of London, the average time between listing and sale agreed for a three-bed house is up from 16 days in March to 18 days in April. In London, this figure is up from 17 days in March to 21 days in April.
Price reductions are also increasing across the sector, with one in 20 (5.1%) properties listed having discounts of 5% or more this month. This compares with one in 22 (4.7%) in the previous 28 days.
The average price cut reduction is 9%, applied to the average home value, this equals a price reduction of around £22,500.
Regionally, 6.2% of homes in the North East have been reduced in price by 5% or more in the four weeks to 15 May, while in the West Midlands, around 4.5% of listings have registered price cuts of the same amount.
Zoopla also revealed on Monday that properties in Wales had the strongest rates of house price growth for the 15th consecutive month at 11.6%. However, growth in London was lagging with the slowest rate at 3.6%.
“High levels of buyer demand mean that the market is still moving quickly, but the time to sell — the time taken between listing a property and agreeing a sale — is starting to rise across most property types in most locations,” Gráinne Gilmore, head of research at Zoopla, said.
“We expect that this measure will continue to rise during the rest of the year as buyer demand levels start to fall, punctured by changing sentiment around the cost of living and personal finances.”
Vincent Dennington, director at John D Wood & Co, said: “We are starting to see more and more price reductions on property portals, which is perhaps an early indication that the market is slowing down.
“However, this may also be a sign that properties have been initially overpriced and are not achieving any interest from potential buyers; therefore needing to be adjusted correctly to ensure a reduction generates new interest and ultimately offers.
“Despite the recent hikes in mortgage rates, they are still cheaper than back in 2015 and the demand remains strong for accurately priced family homes throughout most areas of the UK — now is the right time for vendors to secure their best price.”