A new interactive map reveals how homeowners across the UK have been hit by falling house prices as sales plummeted to levels not seen since Covid and mortgage rates soar.
The average house prices fell in more than half of local authority areas between April and May, with parts of the country seeing drops of £15,000 to £20,000 according to the latest government data.
This comes as a new poll of agents and surveyors revealed that the housing market is in the midst of a fall in sales similar to the start of the pandemic, when the government put a freeze on buying and selling.
A net of 44 per cent of respondents noted a decline in agreed sales during July, according to the latest UK residential market survey by the Royal Institute of Chartered Surveyors (RICS) – the highest on record since spring 2020.
RICS said the results ‘paints the picture of a housing market continuing to lose ground to the effects of higher mortgage rates.’
Buyer enquiries remained low at a figure of -45 per cent, similar to last month’s figure of -46 per cent, which the institute says ‘continues to signal a sharp downturn in buyer demand following the latest escalation in mortgage interest rates.’
The report said near-term sales expectations have ‘subdued’ posting a negative reading of -45 per cent in July which is a significant drop from -38 per cent and -11 per cent in June and May.
MailOnline’s interactive map shows how house prices changed in all of the UK’s local authority areas from April to May this year.
The darker red an area is, the more prices fell, and the deeper blue it appears the more prices rose. The whiter an area the smaller the change. To find out how prices changed between April and May in your area, simply hover your mouse over it on the map.
RICS Chief Economist, Simon Rubinsohn told MailOnline: ‘I think it’s very frustrating in terms of people who want to get on ladder or who want to move.
‘When you have environment where the market is quite sluggish, not a lot going on, and we see that when we look at actual transactions data it is down down.
‘There are still things happening but it is just a lot slower.’
He said the lower prices would not help first time buyers as the ‘economic uncertainty coupled with mortgage rate products coming down, we’re still talking at elevated costs for borrowing which makes it hard for everyone and harder to get on ladder.’
The economist predicted that house prices will continue to steadily decline throughout the rest of the year and he would not be shocked if they fell by another four or five per cent.
And it was revealed last month that mortgage repayments have more than doubled in some parts of the UK since 2020, putting millions at risk of being priced out of their own homes.
Analysis showed how, in three years, half the country went from paying less than £1,000-a-month to more than £1,000-a-month on their mortgage.
The latest figures from the UK housing index reveal that the biggest drop in sale prices from April to May was in Camden, London at nearly £22,000. But this was just a 2.5% fall from around £882,900 to £860,900.
Outside of the volatile central London property market, the leafy West Midlands district of Wychavon, Worcestershire, saw the largest average fall in sale price of a whopping £19,700 (5.7 per cent) – from around £344,500 to £324,800.
Homeowners in the markets towns of Pershore and Evesham have given the impression that the drop will not impact them because many residents are retired.
Estate agent Ben, who did not give his last name, who works for Evesham firm Leggett & James told MailOnline that while headline prices remained ‘robust’, reductions are more common and completed prices were down.
The agent, who has been in the industry for ten years, said: ‘A lot of vendors choosing to sell have seen next door sell for “£X” six months ago and think they can do it.
‘In the last 18 months the housing market was ridiculous and you’d barely have to ask, but now it’s gone back to much traditional model where there are more houses and less buyers.’
‘It’s quieter than we’d like it to be,’ he added.
The estate agent added that compared to cities, house prices were ‘much more fixed in an area like Evesham.’
‘The bracketing of housing that is struggling is anything from £350,000 to £500,000 – which is the most mortgaged amount, but £250,00 is something most can afford.’
He said that sky-high mortgage rates mean someone with a mortgage on a £450,000 property will be paying more than £2,000 a month, which is not affordable.
Commenting on the new sale price figures, Ben said the sales completed in May ‘went through in January or February, just off the back of when Liz Truss killed the market’, so he was not surprised that the price drops coincided with high interest rates following her and Kwasi Kwarteng’s catastrophic mini budget.
He said that prices were now being reduced after six to eight weeks to ‘give it a fair shake’ but just 18 months ago ‘if it had not sold in four days the price is wrong’.
In the borough of Elmbridge, Surrey house prices have also been badly it, falling £15,500 between April to May from around £680,900 to £665,400.
Residents living in the picturesque town of Esher have labelled the fall in house prices ‘disgusting’, but many chose not to believe it would make it difficult to sell a home – due to a lack of housing in the highly-coveted area.
Esher lies just down the road from the historic Sandown Park racecourse in leafy Surrey. The suburban West End area of the town paints a fairytale picture: willows dip their branches into a round pond in which geese and swans swim, with children playing in the sunshine of the park just behind.
Towards the town centre, a woman who gave her name only as Sally explained she and her husband had bought one of the nine one-bedroom apartments in a four-floor, regal-looking Hill House building in August last year.
The couple mainly now live in France and Sally admitted she had not looked at the price of their apartment for a long time.
Another of the nine one-bedroom apartments is on sale with estate agents Savills with a guiding price of £625,000.
Sally said: ‘Obviously you never want to pay more than what a property’s worth.
‘We bought our apartment last year, but we live in France, in August.
‘They put the price up just before we bought it – not by a significant amount but more than it was worth because he [the man selling the apartment] knew we wanted it.
‘It was by a good £10 to 15,000. I haven’t checked the price for a while now.’
Asked what she thought about the average drop of £15,500 from April to May this year, Sally said: ‘It’s huge. It’s unbelievable. Disgusting, to be honest with you.’
Jackie Palmer was born and raised in the picture-postcard town and has lived within view of the West End pond for 15 years, having left and later returned to the area.
The 73-year-old said that though the fall in house prices in the highly affluent area was shocking, it would hardly bother most residents.
‘It’s a beautiful area,’ the mother-of-three said. ‘We are very lucky to live here.
‘But houses in this area have high prices anyway, so I don’t think drops of £15,000 will not affect people in this area that much. We are in a prime position. It’s a beautiful place to live; what more could you ask for?’
Mrs Palmer, who has family members who also live within sight of the pond, added: ‘There are two cottages down the road that have been on the market for a little while, but I am sure they will be snapped up soon.’
An elderly man selling one of the two cottages directly opposite the pond said he and his wife were not at-all worried about selling the home, which is attached to theirs.
The two-bedroom house on Winterdown Road has a guiding price of £725,000.
The seller, who wished to remain anonymous, said: ‘It’s not difficult to sell a house here.
‘It’s a good, prime area – so it sells. It might take a little longer than usual, but it will sell.
‘There’s no rush for us. The housing market will recover; historically it always recovers. Providing you can wait it’s alright, but people who have got to move might not be so alright.
‘People here don’t move very often. Since we’ve been here, we can’t find anywhere that really matches it.
‘It’s a good community, there’s good community activities – and they’re even revamping the pub.’
The local, who has lived in the area for around 20 years, was referring to the Prince of Wales, a pub currently being refurbished which joins a church and a village hall on the edges of the park.
The homeowner compared the current housing market to during the Covid pandemic, saying: ‘I don’t know that there’s any significant difference between the market during Covid and now, to be honest.
‘With Covid you just thought, “Let’s hunker down”. It’s the same now.
‘The cost of living’s up, markets are down… But you only have to look at history to see it will recover. We don’t have enough land, so houses are always going to be needed.
‘A lot of people come here to downsize, and if you’re selling a house in central London for several million pounds these homes no longer seem so expensive.
‘There’s no fear about it getting to a stage where it’s a total loss. Demand is always going to be high. This house next door hasn’t been on the market for very long.
‘We have had an offer already, but they pulled out later, which happens all the time. We’ve just got to accept that we’re in a difficult period.’
A neighbour described how a cottage a few doors down from her has seen drops in prices of more than £100,000 after it remained on the market for months.
Judy, who has lived in her home for 32 years, said the house had been up for sale for ‘quite a long time’, saying: ‘I think it was on sale for £800,000. Then it was reduced to £700,000, then it went down to six-something.
‘It’s not really a family house, but it has a lovely view. It’s got a double bedroom and a loo upstairs, another bedroom, a nice sitting room, a kitchen and another bathroom.
‘It’s been on the market for three months or so, maybe longer. I think it has to do with the drop in house prices.’
One man with motor-neurone disease, who has lived in the area nearly all his life, is holding off selling his home and downsizing to a bungalow until the markets recover.
Semi-retired engineer and scientist Rob, 72, who has lived in the area for nearly his entire life, said mortgage fees today did not come close to comparison with those he was forced to pay in the 1970s.
He said: ‘I’ve seen ups and downs in the housing markets before. We were paying nearly 16 per cent mortgage fees in 1974, so what people are paying today is chicken feed.
‘It was also very difficult to get a mortgage back then. Today is nothing compared to back in those days. Five to six per cent? Just get on with it.
‘I do feel sorry for young people, though, because house prices are so high and renting is a robbery – you’re just paying off your landlord’s mortgage.
‘I have noticed the price falls recently, though.
‘Covid may have driven the market before, and Brexit was a huge financial mistake that is reflected in house prices as well. It has made us a small island of paupers for the next ten, 15 years.
‘I think if people want to sell for a high price it’s difficult. I think it will bounce back in this area because there’s a shortage of houses, which leaves a big question in the market for younger people.’
Rob explained how he was diagnosed with motor neurone disease nearly four years ago. He said he and his wife would soon look at selling their current home in Esher and downsizing to a smaller one.
‘I’m hoping to do a Stephen Hawking and to go for another 50 years,’ he said.
‘My wife and I are thinking about moving to a bungalow, but we would like to stay in this area. It will be mine and my wife’s last place. But we will have to wait until the market sorts itself out. ‘I think we will wait, but my condition may force me to do other things.
‘House prices in this area are rarely below a million, and most are two or three million. It’s a very central palace and I really do like it here.’
Some parts of Britain have proved more resilient to housing market volatility, with the Cities of London and Westminster seeing huge gains in average sale place from April to May of £78,300 and £26,760, respectively.
Outside London, Rutland in the East Midlands saw average prices soar by £19,000 (5.1 per cent), from around £375,100 to to £394,100.
In the longer term, house prices are predicted to continue falling, according to RICS. ‘Realistically next few months are still going to be quite a challenge,’ Mr Rubinsohn said.
‘It is hard to imagine we’ll see markets spring back even though there is some better news on mortgage rates – but they’re not where they were and we don’t know if rates will go up.’
He said there was ‘some evidence that rates will fall but it could reverse’. ‘There is uncertainty running through the second half of the year… and it won’t surprise if we see subdued levels of activity and volumes of sales.’
Easing fears about falls in house prices, he said: ‘Hard data shows that prices have fallen by a pretty small margin: three, four or five per cent.
‘If you think houses rose very sharply during the pandemic so you need perspective. But if you look at survey there is no expectation from members that prices will start rising in near term and they will drift a little lower.’
Mr Rubinsohn added: ‘The recent uptick in mortgage activity looks likely to be reversed over the coming months if the feedback to the latest RICS Residential Survey is anything to go by. The continued weak reading for the new buyer enquiries metric is indicative of the challenges facing prospective purchasers against a backdrop of economic uncertainty, rising interest rates and a tougher credit environment.
‘Just as concerning are the insights being provided around the lettings markets. Demand shows no signs of letting up, supply remains constrained and that means rents are likely to continue rising sharply despite the cost-of-living crisis.’