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UK Housing Market Records Decade-Low Sales as Mortgage Activity Dwindles

The latest house price index, unveiled on August 30 by real estate entity Zoopla, has unveiled a concerning trend in the United Kingdom’s housing market. The analysis indicates that the volume of British homes changing hands this year is poised to plummet to the lowest point observed since 2012.

According to the report, the anticipated figures suggest a disheartening 21% dip in home sales during 2023 in comparison to the previous year’s statistics. As the year progresses, it is expected that roughly one million property transactions will occur by year-end. This projection translates into an average household relocating every 23 years—a significant six-year increase from the data recorded in 2021.

Su Pla, a spokesperson for Zoopla, attributed the waning home demand over the past four weeks—down by 34% in comparison to the average of the past five years—to the pressure exerted by elevated mortgage interest rates and the escalating cost of living. These factors have collectively cast a shadow over the real estate market, deterring potential buyers from pursuing property transactions.

Statistics sourced from the British Office for National Statistics further underscore the challenges faced by the housing market. A stagnation in house price growth has manifested, registering a modest uptick of merely 1.7% in the 12 months leading up to June. During this period, the average house price in the UK reached £288,000 ($364,000) in June—a £5,000 increment from the preceding year. However, this figure remains lower than the peak observed in November 2022, when house prices reached £293,000.

Mr. Richard Donnell, the Executive Director of Su Pla, expressed his views to the media, asserting that despite marginal price hikes, the most significant blow to the housing market has been dealt by escalating borrowing costs. As these challenges persist, the housing sector grapples with an array of complexities that are poised to shape the course of its trajectory in the coming months.

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