Despite the UK’s housing market seeing a ‘tumultuous’ end to the year, 92% of homeowners saw their property increase in value in 2022 by an average of £19,000, new research from Zoopla reveals.
Zoopla says its data on the value of UK homes has shown “a clear shift in momentum over 2022”, with nearly three million homeowners making more than £50,000.
However, not all homeowners saw the value of their homes increase over 2022, with some 2.3m homes registering a fall in value with an average loss of £7,300 (2.7%).
Homeowners in London accounted for 26% of homes registering a decline last year.
Market conditions also weakened during 2022 and the number of homes with reductions in value has started to increase.
Nearly 16m homes have lost an average of £3,900 in value in the final quarter of last year.
Research also found that last year the total value of UK housing breached the £10tn mark early and reached £10.5tn by the end of the year.
This is an increase of £700bn over the year or nearly £80m added to the value of the nation’s housing every hour on average over 2022.
Looking at price gains achieved over the first two years of the pandemic to February 2022 and how values have performed in the last six months, Zoopla data shows that one million homes have lost all their pandemic gains.
Nearly half of these are homes in parts of London – where 20% of those in East Central London and 14% in West London – lost all paper gains and Scotland – 14% in Aberdeenshire lost all paper gains – where home values have not increased as fast over the pandemic as in other areas of the UK.
Meanwhile, the reduction in home values over the second half of last year was concentrated in markets where price gains have been slower over the last year.
Homeowners in London have seen the largest number of reductions in home values followed by the South East.
The average reduction between June and December was £8,400 in London and £5,200 in the South East.
However, in both these areas more homes increased in value than fell showing how the trends in home values are highly localised.
Zoopla executive director Richard Donnell says: “UK homeowners made record gains in the value of their homes over the pandemic years as the nation re-evaluated what we wanted from our homes. These gains have started to be eroded in the final half of 2022 as buyer demand weakened in the face of higher mortgage rates and weaker growth in household incomes.”
“The profile of gains and losses varies right across the country, knocking any notion of a single market that moves in unison across the country. Housing markets vary by geography and price band. The value of a home is important in unlocking that next home moving decision.”
