2022: A year of two halves in the housing market where 9 in 10 homeowners saw their property increase in value yet 2.3 million homes registered a fall
20th January 2023
New analysis into the value of all 30m homes in the UK shows 27 million (92%) homeowners saw their property value increase in 2022 with an average capital gain of £19,000
Weaker market conditions have seen housing values start to fall back in the second half of 2022
8.2 million homeowners saw the value of their home decline - by an average of £4,400 over the final six months of 2022, one million homes have lost their pandemic ‘paper gains’, accumulated between February 2020 and February 2022
14m homes increased in value over the final three months of 2022 highlighting important differences in trends between local markets
The total value of the UK housing market reached £10.5 trillion at the end of 2022
Homeowners can use Zoopla’s My Home to track the value of their home and see if it has increased or decreased
Despite the UK’s housing market seeing a tumultuous end to the year, 92% of homeowners saw their property increase in value in 2022. Pandemic impacts continued to support people’s desire to move home and record-low mortgage rates combined with the chronic lack of homes for sale (37% below the five year average) supported house price growth up until the summer.
Since then, rising living costs and a sharp spike in mortgage rates following the mini budget saw the demand for homes fall by 50% in the final three months of the year which has seen the value of homes start to decline.
92% of homeowners saw their home gain value in 2022
Each month, Zoopla tracks the value of the UK’s 30m homes and this data shows a clear shift in momentum over 2022. Looking across the year, 12 out of 13 homeowners (92%) saw the value of their home increase ban average of £19,000, with nearly three million of them making more than £50,000.
Not everyone’s home gained in value over 2022 however, with some 2.3 million homes registering a fall in value with an average loss of £7,300 (2.7%). Homeowners in London accounted for over a quarter (26%) of homes registering a decline in 2022.
Over the course of 2022, market conditions have weakened and the number of homes with reductions in value has started to increase. Nearly 16 million homes have lost an average of £3,900 in value in the final quarter of 2022 - see chart below.
Value of UK’s housing market reaches £10.5 trillion
The total value of UK housing breached the £10 trillion mark early in 2022 and reached £10.5 trillion by the end of 2022. This is an increase of £700 billion over the year, or nearly £80 million 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 then how values have performed in the last six months, Zoopla data shows one million homes have lost all their pandemic gains. Nearly half of these are homes in parts of London (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.
Value reductions focused in London and the South East over the second half of 2022
The reduction in home values over the second half of 2022 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. In both these areas however, more homes increased in value than fell showing how the trends in home values are highly localised.
Commenting on the analysis Richard Donnell, Executive Director at Zoopla 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. While the headlines might talk of UK house price falls in 2023 each home will have its own trajectory so speaking to an agent or tracking your home value online are ways households can stay in touch with the value of their largest asset."
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