This downturn may require sellers’ patience as homes may take longer to flog, as values drop to pre-pandemic levels.
Bank Halifax predicts prices will drop by 8 per cent this year, although this drop would not be enough to wipe away all the gains made in recent years.
With the average house price in the UK £296,422 according to the latest UK House Price Index measure, that would mean the average house losing £23,713 next year.
Halifax added that between March 2020 and August 2022 the average house prices rose by 23% - around £55,000.
Halifax homes director Andrew Asaam said: "Such a fall would place the average property price back at roughly the level it was in April 2021, reversing only some of the gains made during the pandemic."
While homeowners are set to lose out this year, those looking to get onto the property ladder will be helped by falling prices. An increase in living costs - including some mortgage outgoings - and unemployment being expected to rise will add to the challenges the housing market faces. But a continued lack of pads for people to choose from is expected to continue to support house prices.
Nationwide Building Society has a slightly less depressing forecast for homeowners as it predicts prices could slump by as much as five per cent in the coming year. Trade association UK Finance said it says the total houses sold this year will fall to about 1,000,000 this year, down from 1.2million last year.
Zoopla expects sales will be supported by buyers looking for space to work from home, an ongoing spike in people retiring and – amid high energy costs – some people moving to properties that may be more cost-effective to run than their current homes.
