Zoopla believes that the housing market is slowly transitioning to a buyers market as higher mortgage rates are set to hit household buying power by up to 28% and asking price reductions could return to pre-pandemic levels.

The firm believes stamp duty changes will support lower value markets and help first-time buyers in southern England, while the increase in the stamp duty threshold to £250,000 takes 43% of homes out of stamp duty.

Zoopla says that UK house growth remains stable at +8.2% year-on-year, despite increasing cost of living pressures with the pandemic price gains compounding the issue of affordability, especially in southern England.

Some regions including Wales, the North East and Scotland have seen 10 years of growth compressed into just two over the pandemic, it said.

Zoopla added that rising mortgage rates will impact buying power – although this will be partially offset by the cut to stamp duty.

Richard Donnell, executive director at Zoopla, said: “Measures of housing market activity have been very resilient over the summer. A surge in home values over the pandemic and the rise of mortgage rates means we face a sizable hit to household buying power over the rest of 2022 and into 2023.

“While the recent changes to stamp duty are welcome, supporting activity in regional markets and the first time buyer market in southern England, the increase in mortgage rates will erode much of the gains. Homeowners that want to sell their home this year need to price realistically and seek the advice of an agent on local market trends.”