Zoopla has called fears of a market crash and double-digit house price falls “unwarranted”.
The company claimed the housing market is in a much better shape to weather economic headwinds than in previous cycles.
As it stands there’s been no sign of a significant drop-off in buyer interest in response to higher mortgage rates and cost of living pressures.
However Zoopla added that the cost of living squeeze should start to bite in early 2023, cooling down the housing market.
Richard Donnell, executive director of research at Zoopla, said: “The ongoing impact of the pandemic continues to support a desire to move amongst home buyers. This is a big reason why the market is not slowing as fast as some might expect and demand remains for sensibly priced homes, especially in more affordable areas.
“The housing market is not immune from higher mortgage rates which we are starting to see increase quickly. Buyer interest is expected to slow over the coming months as people tighten their belts and spend with more caution which will see price growth weaken further.
“Whilst we don’t expect current trends to lead to a marked drop in house prices next year, buyers will become more wary and it is important sellers are realistic when pricing their homes to sell.
Demand for homes has slowed over 2022 but is 25% above average over the last five years.
House price growth currently stands at 8.3%, but it’s predicted to fall back to 5% by the end of 2022.
Richard Davies, managing director of Chestertons, said: “To date, 2022’s housing market has been extremely active. The number of buyer enquiries in the first half of this year has doubled compared to the first half of 2019; before the pandemic.
“Although we would normally expect the market to slow down towards the summer, we are seeing a continuous uplift in buyer registrations. This suggests that, despite economic challenges and the changes to mortgage rules, buyer appetite remains on an upwards trend.”
“One driving factor behind house hunters wanting to move sooner rather than later are interest rates. With the Bank of England putting up rates more than once this year, many buyers have established a stronger sense of urgency.
“Another reason that drives buyer enquiries is that the market is seeing a post-pandemic reshuffle. After many house hunters put their search on hold or changed priorities over the past two years, we have since been registering enquiries from families wanting to finally make their move a reality as well as international students, international buyers and office workers who require a pied-à-terre closer to work again.”
London remains the UK’s most unaffordable housing market where house prices are 11.6x average earnings and prices are rising at the slowest rate of 4%.
Zoopla’s data shows demand for homes is weakest in markets that have been experiencing some of the highest price increases in areas like the South West and Wales, while demand remains strong in more affordable markets and cities outside the South East.