- House prices in Cornwall fell by 1.3% in December, more than regional average
The property market boom in Cornwall has come to an end after the market which soared during the pandemic has now cooled, with prices falling by nearly 1.5 per cent.
Houses and flats in Cornwall are now selling for less compared to last year, and can take over two months to sell, as estate agents struggle to find buyers – and one six-bed family home had to drop its asking price from £750,000 to £695,000.
Since 2019, the average property price in Cornwall increased by 35 per cent to £313,420, according to estate agents Hamptons.
But prices fell rapidly last year by 1.3 per cent in December, more than the fall in the South West of 0.5 per cent.
Properties took 77 days – around two-and-a-half months – to sell on average last year, which is the longest sell time in since 2015, Hamptons say.
According to analysis by PropCast, which studies the proportion of properties for sale that are under offer, Cornwall is now a buyer’s market for the first time since Covid.
Around 31 per cent of properties for sale are under offer at present, which is a fall of eight percentage points since the same month last year, The Telegraph reports.
Properties wait around longer up for sale and are more likely to have the price slashed.
Sellers have had to bring prices down to cope with the changing market. A six-bed detached house on the Lizard Peninsula saw its price fall from £750,000 to £695,000 – by £55,000 – from August to December last year.
A four-bed detached house with its own pool in St Mawgan had its asking price dropped from £1.5million to 1.25million from July to February. And a two-bedroom cottage in the same part of Cornwall has had its asking price slashed twice since December from £525,000 to £499,000.
In Cornwall, 3.2 per cent of properties up for sale had a price reduction of five per cent or more in the four weeks to March 17, which is less than than a year prior, according to property website Zoopla.
But house buyers have noticed, and the total sales agreed in the first eight weeks of this year is 23 per cent higher than last year, according to Savills who have used TwentyCi data.
Buyers and sellers are reportedly now adjusting to the ‘new normal’ of five per cent interest rates and some are fed up of waiting around, Robin Thomas of Recoco Property Search told The Telegraph. He told the paper that he has had his first two clients – cash buyers with budgets more than £1.5million – in Cornwall in three months.
He said that last year there was a ‘huge divergence’ between what sellers expected to sell for and what clued-up buyers were willing to pay which caused blockages in the market.
Mr Thomas said there has now been a price adjustment and that many properties worth over £1million are going on sale ‘off-market’.
But the coast of Cornwall is the most popular places for clients of First In The Door founder Claire Whisker, which matches house buyers with agents.
She told The Telegraph that more people are moving to Cornwall rather than buying holiday homes. She said there was an increase in housing stock and buyers are getting reductions in the asking price, which did not happen in 2022.
And Savills has found that the high-end properties have dropped off in price even moreso, with the price of the most expensive homes falling by 8.7 per cent in the year to September 2023 – higher than the 6.5 per cent average for coastal locations in the UK.
Jonathan Start, of Start & Co, told The Telegraph that for properties below £500,000, the market is more active as buyers think that prices are unlikely to fall further, after a 10 to 15 per cent fall since 2022.
The reduction in the higher rate of capital gains tax on residential property sales from 28 per cent to 24 per cent, and the removal of tax reliefs for some holiday lets could lead to a decline in people entering the holiday home business, Josephine Ashby, from agents John Bray & Partners told The Telegraph.
HOUSE PRICES in Finland fell by more than five per cent year-on-year in February.
Statistics Finland on Thursday reported that the prices of old dwellings in housing companies fell especially in large cities – by 10.4 per cent in Vantaa, 7.1 per cent in Helsinki and 6.8 per cent in Oulu.
While the six largest cities in the country recorded a drop of 6.1 per cent and the capital region a drop of 6.7 per cent from the previous year, areas outside the largest cities registered one of 4.4 per cent.
Also the volume of sales decreased, with real estate agents brokering 15 per cent fewer sales in February 2024 than in February 2023.
The preliminary data offer some grounds for optimism, too. The prices of old dwellings in housing companies crept up by 1.4 per cent from the previous month, with increases recorded also in all large cities.
“In February, the development of home prices was better than expected both in and outside the capital region. The development witnessed at the start of the year is a reflection of the tax code change that took effect at the turn of the year, which encouraged first-time home buyers to take action late last year and decreased sales early this year,” Joona Widgrén, a senior economist at OP Financial Group, analysed according to Helsingin Sanomat.
“[The change] explains the lacklustre sales in January—February.”
Although house prices developed slightly better than the financial services provider expected, a more meaningful recovery will hinge on market activity, according to Widgrén.
“People will still have to wait for a recovery in the house market because sales volumes recover will have to recover before prices start increasing on a more permanent basis,” he stated.
Also Juhana Brotherus, the chief economist at the Federation of Finnish Enterprises, estimated that the market will continue to decline for some time. An upswing, he predicted, will not occur until later this year once falling interest rates and strengthening purchasing power make the financial equation more favourable for potential buyers.
“The house market is being depressed by hard and soft headwinds,” he wrote. “Buyers are losing interest because interest costs and maintenance fees can exceptionally be even higher than rents. Also loan repayments add to the monthly costs. At the same time, households are extremely cautious and sensitive to crises because their general sense of security has been shaken by the coronavirus, energy, war and, most recently, strike crises.”
“The uncertainties are reducing especially large acquisitions, of which home is the most important.”
Veera Holappa, a senior economist at Pellervo Economic Research (PTT), is slightly more optimistic, estimating that the return of first-time buyers could provide a boon to the housing market as soon as this spring.
“As household sentiment improves and first-time house buyers are starting to return to the market, chains of sales will start going through. It could rejuvenate the market as soon as at the dawn of summer,” she said.
Aleksi Teivainen – HT
- Some 44% of homes fell in price in 2023 – most of them in the south of England
- But 35% of homeowners saw value of their home increase, says Zoopla
- Rossendale in North West had highest proportion of homes rising by 5% or more
- Hamptons also reports that market appears to have turned corner in 2024
More than two in five homeowners saw the value of their property fall last year, according to the latest analysis by Zoopla.
The property website says 13 per cent of homes fell in value by 5 per cent or more in 2023, while a further 31 per cent fell in value by between 1 and 5 per cent.
In contrast, there were some areas of the country where almost a fifth of homeowners saw their house price rise by more than 5 per cent.
We look at the house price winners and losers of 2023.
Where are house prices falling – or growing slower?
The falls have been felt more in the South of England with 18 per cent of homeowners in the South East seeing their homes fall in value by 5 per cent or more.
Zoopla says it has noticed that housing markets close to rural and coastal areas in the south East have cooled since the pandemic boom.
More than half of homeowners in the seaside towns of Dover and Hastings will have seen a 5 per cent home value decline in 2023, for example.
However, while the average UK house price moved lower over 2023, the nation’s 30 million homes are spread across thousands of housing markets, each with its own characteristics and drivers.
Related Articles
HOW THIS IS MONEY CAN HELP
More than a third of homeowners saw their home increase in value, according to Zoopla’s analysis.
In fact, one in 10 homeowners would have seen their house price rise by 5 per cent or more in 2023. That equates to three million households.
However, the overall gains by those households that did rise in value last year were significantly less than in the previous year.
It says the average annual gain made by homeowners whose properties rose in value, was £7,800 last year – a big drop from the £19,700 recorded in 2022.
Where are house prices going up?
Zoopla noted a clear north-south divide in the fortunes of homeowners in 2023 as lower prices cushioned the impact of higher mortgage rates in more affordable parts of the country.
As a result, it says more homes actually registered increased values in northern Britain.
Last year, the North West had the highest proportion of homes rising in value by 5 per cent or more.
Zoopla says that half a million homes (17 per cent of houses) in the region recorded gains of over 5 per cent or more.
The North West was closely followed by Scotland, where 16 per cent of homes increased in value by 5 per cent or more in 2023.
Izabella Lubowiecka, senior property researcher at Zoopla says: ‘While national house prices indices pointed to modest house price falls over 2023, our property by property level tracking of home values shows that most homes saw their value unchanged or slightly higher over the year.
‘Value reductions were focused in southern England while modest gains were recorded in lower priced, more affordable housing markets.’
Rossendale is hottest property market
One local area in particular bucked the typical housing market trend in 2023 – one of prices predominantly falling or stagnating.
The borough of Rossendale in the North West of England was rated as the hottest property market of 2023 by Zoopla, with the highest concentration of homes increasing in value by 5 per cent or more of any local authority.
Some 44.2 per cent of homes have risen in value by 5 per cent or more in that area, according to Zoopla’s data.
Rossendale is situated in East Lancashire, bordering Bury, Hyndburn, Burnley, Todmorden and Rochdale.
Graham Shuttleworth, manager at Ryder & Dutton estate agents in the town of Rawtenstall, which is based in the Rossendale borough, says the area is benefitting from the house price ripple effect coming out of Manchester as well as millions of pounds of investment coming into the area from the government’s levelling up scheme.
‘There are three really exciting market towns that are driving growth in Rossendale. Rawtenstall, Haslingden and Bacup. All are great places to live and within easy commuting distance of Manchester city centre.
It’s a perfect destination for all ages who want to move out of the city centre but stay close by Rossendale estate agent, Graham Shuttleworth
‘We are based in Rawtenstall and the place just keeps improving with increasing numbers of trendy bars, shops, craft breweries and restaurants opening up.
‘If you miss the traffic it takes 20 minutes to drive into Manchester and otherwise it’s 45 mins in rush hour, via the convenient M66 link.
‘So it’s a perfect destination for all ages who want to move out of the city centre but stay close by. The area has become really popular for families.
‘There is also a massive amount of regeneration coming into some of the town centre redevelopments in the area linked to government levelling up funding.
‘Haslingden Market town centre is being redesigned while similar multi million pound projects are underway in Bacup and Rawtenstall.’
Other local areas that saw roughly a third of homes increase in value by 5 per cent or more include Blackburn with Darwen in the North West of England and Telford and Wrekin in the West Midlands.
What next for house prices?
Zoopla is predicting modest house price falls of 2 per cent in 2024 across the UK.
However, as shown, exactly how this affects individual homeowners will depend on their location.
Zoopla expects those who saw home value growth in 2023 to see similar increases in 2024.
It says high mortgage rates will continue to limit buying power and will be most felt in high-value regions in the South of England, contributing to further home value drops.
This is particularly true for those who own a flat or detached home in the South, who Zoopla advises should continue to price realistically in order to complete a sale.
However, while Zoopla is predicting more of the same in 2024, the property agent Hamptons is reporting that the housing market has turned a corner.
In January, sellers were less likely to cut their asking price than at any time over the last eight months, according to Hamptons.
It revealed that 48 per cent of homes sold in January across England and Wales had been subject to a price reduction, down from a peak of 55 per cent in October 2023.
Over a quarter of these homes sold above their final asking price, the highest share since October 2022.
Hamptons also reported that with more buyers around, new homes coming onto the market are selling quicker than they were last year.
It said 9 per cent of homes that came onto the market in January sold within a week, up from 6 per cent in January 2023.
However, given that many buyers and sellers are still trying to adjust to the market, this figure remains considerably lower than in January 2021 when 19 per cent of homes sold within a week.
Aneisha Beveridge, head of research at Hamptons, believes the early signs in 2024 suggest that the market has firmly turned the page.
‘Falling mortgage rates have been the primary catalyst, tempting last year’s missing movers to restart their property search,’ says Beveridge.
‘Consequently, more households were looking to buy last month than in any January over the last decade, including the start of both 2021 and 2022.
‘First-time buyers and second steppers, who tend to be most reliant on mortgage finance, are at the forefront of the recovery.
‘This injection of demand is starting to stabilise house price falls, particularly for mid to lower-priced homes, which should also improve selling conditions further up the chain as the year progresses.
‘That said, the affordability picture is still more challenging than it was a few years ago which will keep a tight lid on price growth.’
Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.
- Propertymark has issued its latest report into the state of the housing market
- Report revealed a 28 per cent drop in the number of new properties for sale
- There was also a 31 per cent decrease in the number of buyers registered
The number of property sales continued to fall at the end of last year, while more properties are selling for less than expected, a new report suggests.
The report is the latest insight into the state of Britain’s housing market, and has been published by property agents trade body Propertymark.
It said that there was a 28 per cent reduction in the number of new properties coming to market last month.
And at the same time, there was a 31 per cent decrease in the number of buyers registered.
The number of sales agreed was also down, with the report saying they continued to fall to just four for every estate agency branch in December, down from six the previous month.
This lower demand helps to explain the slight increase in the percentage of agents reporting homes selling for less than the asking price.
There was also a slight decrease in the number of agents reporting that properties were selling at asking price.
Estate agents described December as a ‘gloomy’ month, but a new picture is emerging at the beginning of 2024 with a notable uplift in the number of buyers now registering.
Alex Lyle, of estate agents Antony Roberts, said: ‘Last year we noted a real return to seasonality. December tends to be quieter as you are fighting against Christmas, there are few new buyers, little new stock and people who are toying with the idea of moving sit on their hands and wait for the new year.
‘There was little good news before Christmas, aside from another hold in base rate from the Bank of England. That was the start of something but not significant enough to motivate buyers and sellers as lenders hadn’t really started reducing their mortgage rates.
‘If you asked sellers in December how confident they were about finding a buyer, they would have been pretty gloomy about their prospects.
‘There is a fair chance they would have been on the market for some time as few choose to launch in December, so it would be likely that their property had been for sale since September or October, when the market was busier. Come December and if they haven’t sold by then, they may be thinking their chances have slipped.
‘It’s worth noting that the picture is quite different since the turn of the year with a significant increase in buyers registering and a surge in activity which means our agents’ diaries are full.’
And Nathan Emerson, of Propertymark, said: ‘December marks the end of an interesting and challenging year within the property market.
‘In the wider economy interest rates have stabilised, however, inflationary concerns remain, and GDP growth has been anaemic.
‘In response to these and other factors, house prices have fallen in some areas.’
Its latest figures stated that the average house price dropped to £301,613 in November, down from £305,148 in October.
Mr Emerson added: ‘In the residential sales sector, we have reached the trough of the seasonal trend that begins in Autumn and runs to Christmas.
‘Key supply and demand indicators, such as the number of buyers registered and number of new sales instructions, are at their lowest points in the year.
‘As we head into 2024, pressures remain on house prices, with further adjustments required to match valuations to market expectations.
‘Looking forward to January, we can expect a lively start to the year, whether or not this sets the pace for the year as whole will depend on the stability of the wider economy and the actions of policymakers.’
Back in December, Nationwide Building Society separately reported that house prices ended 2023 down 1.8 per cent compared with a year ago.
It said the typical home in Britain was then worth £259,157, almost 4.5 per cent below the all-time high recorded in late summer 2022.
While house prices have only fallen slightly over the past 12 months, the number of homes being bought and sold was severely down in 2023.
The total number of transactions has been running at around 10 per cent below pre-pandemic levels during the past six months, according to Nationwide, with those involving a mortgage down by around 20 per cent, reflecting the impact of higher borrowing costs.
However, fixed mortgage rates are continuing to fall back from their summer peak.
- There are some 670,000 homes in Britain with a price tag of at least £1million
- Savills data found number of property millionaires fell by 8.3 per cent in a year
Some of Britain’s newly-minted property millionaires have lost their £1million home-owning status, according to a leading estate agent.
The number of £1million-plus homes in Britain peaked during the pandemic property boom, but has now slipped back after the race for space fizzled out and higher mortgage rates hit the market.
Savills said that at the end of 2023 there were an estimated 670,000 homes across Britain with a price tag of at least £1million, down 60,260 – or 8.3 per cent – on the year before.
However, this is still up 28 per cent – at an increase of 146,490 – compared to 2019, with most of the movement concentrated beyond the capital.
Britain’s £1million home market now stands at £1.32trillion, down from £1.43trillion in 2022, the estate agent said.
Lucian Cook, of Savills, explained: ‘The race for space and dash to the countryside from mid-2020 drove a sharp increase in the number of £1million homes outside of London and other urban settings.
‘However, increased mortgage costs and a rebalancing of demand back to city living have meant about 30 per cent of the those whose homes crossed the £1million threshold, have, for the time being at least, become aspiring million pound homeowners once again.’
London saw the smallest decrease in property millionaires last year – with a drop of 4 per cent, followed by Scotland, which was down 5 per cent.
Areas outside of London saw the most significant drop in property millionaires. But the number of £1million homes outside of London still remains 52 per cent higher than 2019.
Wales has seen an increase of 113 per cent, while the North East – where numbers are up 79 per cent -and the East Midlands – up 79 per cent – have seen the most significant uplift in housing stock valued at £1million or more over that period.
It follows separate analysis of £1million-plus sales by TwentyCI last year, which revealed that London locations continue to dominate the £1million map.
The boroughs of Kensington & Chelsea, Westminster, Camden, Hammersmith & Fulham and Richmond-Upon-Thames had the highest percentage of sales that were above £1million in 2023.
Indeed, London locations made up eight of the top 10 local authorities, joined by Elmbridge and Mole Valley outside of London.
Mr Cook added: ‘New one million-pound hotspots popped up across the breadth of Britain in the wake of the pandemic, as affluent home buyers changed priorities in the search for more space.
‘However in 2023, prime property prices held up stronger in the capital than across the rest of the country – down 1.1 per cent verses down 4.8 per cent – meaning London boroughs have been more easily been able to hold on to their share of £1million property sales.’
A square in the heart of Londonwas recently named as Britain’s most expensive place to live.
Mayfair’s Grosvenor Square led the Halifax annual survey of the most expensive streets in Britain, with an average price tag of £20.35million.
Heading west to the borough of Kensington and Chelsea in fashionable Notting Hill, Clarendon Road took second spot with an average price tag just shy of the £20million mark, at £19.96million.
Making up the top three – and home to world-famous luxury shopping destination Harrods – was London’s Knightsbridge, where properties cost an average £19.95million.
If a home on one of London’ priciest streets is top of the Christmas list this year, deep pockets will be needed, with the average price tag now £14.5million.
- NatWest, First Direct, TSB and MPowered Mortgages announced rate cuts today
- From tomorrow, there will be a total of ten sub-4% fixed rate deals on the market
- Could this revive the sluggish property market?
Mortgage lenders are cutting rates on a daily basis, leading some to suggest the sluggish property market could be in for a rebound this year.
NatWest, First Direct, TSB and MPowered Mortgages all announced mortgage rate cuts today.
This followed on from HSBC’s announcement yesterday as well as cuts from Halifax and Gen H at the start of the year.
So far this year, there have also been rate reductions from Lloyds Bank, Leeds Building Society, Blusetone Mortgages, Hodge and LendInvest Mortgages.
The average five-year fixed mortgage rate across the whole market has dropped from 5.53 per cent to 5.46 per cent in the past day alone, according to Moneyfacts.
Meanwhile, the average two-year fix has fallen from 5.92 per cent to 5.87 per cent.
From tomorrow, there will be a total of ten fixed rate deals on the market that offer rates below 4 per cent.
The cheapest deals are aimed at those who have at least 40 per cent equity in their home, or a 40 per cent deposit to put down if buying (60 per cent loan-to-value).
HSBC is offering existing customers a 3.87 per cent five-year fixed deal at 60 per cent loan-to-value, with a £999 fee. New HSBC customers can also secure a 3.94 per cent rate.
Related Articles
HOW THIS IS MONEY CAN HELP
From tomorrow, NatWest is cutting rates by up to 0.42 percentage points across most of its fixed rate products, with reductions for first-time buyers, home movers and those remortgaging.
First Direct has also announced a swathe of rate cuts, including two deals below 4 per cent, one is a 10-year fix and the other a five-year fix – both at 60 per cent loan-to-value.
TSB has focused on cutting two-year fixes, which are currently more expensive than five-year but are preferred by some buyers because they expect that rates will have fallen by the time they come to remortgage.
Its two-year first time buyer mortgages have reduced by up to 0.55 percentage points, with rates now starting at 4.54 per cent for those with the biggest deposits.
TSB has also cut two-year rates for remortgage customers by up to 0.4 percentage points. Rates now start at 4.44 per cent for those with at least 40 per cent equity in their homes.
Meanwhile, new mortgage lender MPowered has continued to push the high street lenders further. Its five-year fixed rates are now starting from 4.13 per cent.
For those with smaller deposits or less equity in their homes, rates are also improving.
Gen H is offering a mortgage that will cover 95 per cent of a property’s value at a rate of 4.95 per cent with a £999 fee. This is aimed at both buyers and those remortgaging.
First Direct has also announced significant cuts, aimed at those buying or remortgaging with lower deposits or levels of equity.
Those requiring mortgages that cover 90 per cent of a property’s value can get rates starting at 4.69 per cent via its five-year fixed standard mortgage.
Mortgage brokers are adamant that rates will continue to slide down from here, with some arguing we could get 3.5 per cent rates by June.
This is because the Bank of England’s base rate, which influences mortgage pricing, is forecast to be cut in 2024 as inflation falls.
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: ‘Fixed-rate mortgage pricing is heavily influenced by future interest rate expectations.
‘As long as the markets believe that direction of travel will continue, aligned to lenders’ increased appetite to lend, we expect rates across the board to fall further.
‘While crystal balls are notoriously inaccurate, it is not inconceivable that with an early base rate cut we could see markets react further and lenders release products closer to 3.5 per cent by June.’
Will cheaper mortgage rates affect house prices?
Volatile and higher mortgage rates weighed heavily on the housing market in 2023.
House prices ended 2023 down 1.8 per cent compared with a year ago, according to the latest figures from Nationwide Building Society.
Meanwhile, the number of property transactions fell by 22 per cent in the year to November 2023, according to the latest HMRC figures.
The end of 2023 saw uncharacteristically high activity during the usual seasonal slowdown, which will tee things up nicely for a stronger housing market in 2024 Sam Mitchell, Purplebricks
The expectation is that falling mortgage rates could help stimulate the housing market.
Sam Mitchell, chief executive of online estate agent Purplebricks says: ‘The mortgage rate cuts we have seen so far this year are good news for the property industry, and other lenders are sure to follow.
‘The end of last year saw uncharacteristically high activity during the traditional seasonal slowdown which will tee things up nicely for a stronger housing market in 2024, and hopefully beyond.
‘Lowering mortgage rates will boost affordability and demand. This will not only benefit those already on the property ladder, who can take advantage of better remortgage rates, but also first time buyers who have previously found it difficult to access the market.’
Adrian MacDiarmid, head of mortgage lender relations at housebuilder Barratt Developments, adds: ‘We have already seen some cuts to mortgage interests at the start of the year and would expect more lenders to follow in the coming days.
‘There are a lot of lenders competing for market share and this will bring more opportunities to buy a home.
‘Prospective buyers who feared that purchasing their own home was beyond them – because of barriers such as saving for a deposit – could find that mortgages are cheaper than they had expected.’
However, while mortgage rates have fallen to their lowest level since May last year, they remain far higher than the 1-2 per cent rates many had grown accustomed to before rates began rising in 2022.
The average five-year fixed rate mortgage is still currently 5.46 per cent, according to Moneyfacts. Two years ago the average rate was 2.66 per cent.
On a £200,000 mortgage being repaid over 25 years, that’s the difference between paying £1,223 a month and £913 a month.
Unsurprisingly, some market commentators argue it is still too early to say whether recent rate cuts will have any impact on house prices.
Forecasts for house prices in 2024 are not overly positive. Some are predicting prices to remain fairly flat, while others are expecting 5 per cent average falls by the end of the year.
> Will house prices rise or fall in 2024? Read all the forecasts here
Jeremy Leaf, north London estate agent and a former Rics residential chairman, says: ‘The timing of the rate reductions is great for the market and will have an effect on saleability and activity but not necessarily prices as people are still nervous about pushing the boat out too far until they have some longer-term indication that the market is not going to go backwards.
‘Many people have said to us that March’s Budget should also help, which is partly counterbalanced by the impact of a general election later in the year.
‘But overall, this is a shot in the arm for the market and acting as a delayed Christmas present.
‘We haven’t seen any new year fireworks yet, but there is undeniably more confidence among buyers and sellers.’
Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.