How long will the property market slump last?

The latest research by estate agent comparison site, GetAgent.co.uk, has revealed that while 155,000 home sellers could be impacted by a drop in house prices, a period of house depreciation is only likely to last a matter of months before the market rebounds.

GetAgent analysed property market data going back to 2005, looking at each period of house price decline, the level of transactions impacted by falling house prices and how long this period of decline lasted before positive house price growth returned.

The research shows that across Britain, there have been 32 periods of house price decline since 2005, the majority of which have been singular monthly declines, with the worst lasting 10.

On average, these periods of decline have lasted just 2.2 months, with an average of 154,704 transactions taking place, meaning an estimated 69,766 home sellers per month are thought to have been impacted by falling house prices.

In contrast, there have also been 32 periods of buoyant house price growth, lasting 4.4 months on average, with the longest running for 19 months in 2015. During these more buoyant periods, an average of 381,452 homes were sold, meaning an estimated 85,961 home sellers per month benefitted from appreciating property values.

England is home to the strongest market when it comes to the balance between boom and bust, with the average period of house price decline lasting 2.3 months versus an average of 4.6 months when house prices have climbed.

Scotland is home to a more balanced market in this respect, with house prices falling by an average of 2.0 months, whilst periods of house price growth last just 2.6 months on average.

Wales is home to the lowest average period of house price decline at 1.5 months, although periods of property price appreciation also only last for an average of 2.3 months.

Co-founder and CEO of GetAgent.co.uk, Colby Short commented: “Last week’s UK House Price Index revealed the first signs of a house price downturn, with the monthly rate of growth dropping for the first time since October 2021.

“This may understandably come as a cause for concern for the nation’s home sellers but the chances are they have nothing to worry about in the long-term.

“The property selling process is a protracted one and as our research shows, any period of downward price movement is generally short lived, not to mention often marginal.

“Of course, historic data can only provide insight into the past performance of the market and it certainly doesn’t provide a guarantee of future market trends. But while we may have seen a slight reduction on a month to month basis, the overall market is still in very fine shape and sellers remain in a very strong position as a result.”