UK house annual price growth slowed again to 4.1% in March to £259,700 for an average home, data from Zoopla shows, but adds that the market is faring “better than expected” with sales on track for one million transactions this year.  

The quarterly growth rate of homes has eased over the last three months in a row – this compares to a year ago when prices charged ahead at 8.9%, says the property website’s latest House Price Index.  

It points out that the last three months has seen the weakest quarterly growth rate since 2011.  

But the report says the market is going through a period of “soft repricing” as buyers return.  

It points out that “in recent weeks” the demand for homes hit their highest level since last October, when the fallout of the September mini-Budget hurt activity.   

Demand is 16% higher than this time in 2019, before the pandemic.  

The study says the home market “is on track” for 500,000 completions in the first half of the year, and one million sales by the end of 2023, in line with its previous forecast.   

It adds: “This is well ahead of the years following the global financial crisis of 2008-2011.”  

However, it also points out that agreed sales agreed are 16% lower than this time last year, while demand is down 43% compared to 12 months before.   

Sales surged in 2022, driven by a lack of supply, the post-pandemic ‘race for space and lower mortgage rates at the start of the year.  

By contrast, sellers in this current market are on average accepting deals 4%, or £14,000, below their original asking prices.  

Last year’s “chronic undersupply of homes for sale” has begun to ease with estate agent offices on average having 25 properties for sale, a 65% jump on a year ago.  

The report says: “This is a positive change and improves buyer choice meaning sellers need to price sensibly if they are serious about moving.”  

Mortgage rates are set to remain around 4% over much of 2023 and could move lower towards the end of the year, it adds.  

The study says: “As we end the first quarter of 2023, the housing market is in much better shape than many predicted at the end of 2022.   

“Arguably, the market is more in balance than at any time for the last three years.”  

However, Hargreaves Lansdown head of personal finance Sarah Coles points out that the green shoots of recovery in the market may yet be hit by “a lethal frost”.  

Coles says: “There are no guarantees that the spring is set for the kind of flourishing market estate agents are hoping for.  

“There are some real positives, with more sellers coming to the market, which is enabling a reasonably steady stream of sales.   

“Bank of England figures have also shown that mortgage approvals for the coming months have picked up very slightly, and, assuming the current bump in mortgage rates is a temporary blip, the market could benefit from further falls in rates.   

“Meanwhile, the strength in the labour market and rapidly rising rents are keeping a floor under demand.”  

But Coles points out that falling demand and sales over the last year, allied with sliding asking prices over the last quarter may prove to be a “tough climate” for a recovery in the housing market to take root in.  

She adds: “We have to take all the positives we can get in the property market at the moment, but asking price inflation continues to fall, and there’s little sign of that reversing any time soon.   

“Nationwide figures show selling prices are now almost 5% below the peak in August last year, and we could realistically expect them to fall further before the correction is finished.”