The average cost of a home has fallen at its fastest rate for more than 12 years, with UK property values sitting typically £6,000 lower in November 2023 than a year earlier, according to official figures.
According to the Office of National Statistics (ONS), property values fell by 2.1 percent over the 12 months to November 2023 to reach £285,000 on average.
Average house prices over the 12 months to November 2023 decreased in England to £302,000 (a 2.9 percent fall) and in Wales to £213,000 (down 2.4 percent), but increased in Scotland to £194,000 (a 2.2 percent rise).
Average house prices also increased in Northern Ireland by 2.1 percent annually to £180,000.
Frances McDonald, director of research at Savills, commented: “Today’s ONS house price index for November indicates that stretched mortgage affordability continued to place downward pressure on house prices in the final weeks of 2023.
“Looking ahead there are encouraging signs that buyers are gaining confidence as mortgage rates fall, though today’s surprise inflation figures may push out expectations of a Bank of England base rate cut.”
According to ONS, the North East was the English region that saw the smallest decrease in average house prices in the 12 months to November 2023 at minus four percent.
Meanwhile, London house prices fell at the fastest pace since 2009. Average prices in the capital decreased by six percent in the 12 months to November 2023.
This reflects a drop from an annual inflation rate of minus 3.4 percent in the 12 months to October 2023. Prices fell by more than £10,000 in November alone, £26,000 in the space of two months.
However, London’s average house prices remain the most expensive of any region in the UK at £505,000 on average in November 2023.
Iain McKenzie, CEO of The Guild of Property Professionals, commented: “A fall of around two percent in the space of 12 months is modest considering the scale of the challenges that have faced the economy. Forecasts at the start of last year suggested prices would fall off a cliff, following significant increases during the pandemic years.
“Today’s figures show that UK house prices have decreased by £6,000 which – although will be unwelcome news to sellers – could have been much worse.”
Mr McKenzie added that the property industry has always been marked by adaptability, and estate agents across the country have been able to work with sellers to keep healthy levels of properties on the market.
He continued: “Dreams of homeownership have also endured, driven in part by the demand from renters to move away from the expensive rental market.
“While we saw a slight increase in inflation today, it has still been more than halved since earlier last year and this should eventually trickle down to how much prospective buyers are able to save for a deposit. High interest rates remain an obstacle for many, with repayments on some deals outstripping affordability. Lenders are becoming more competitive with their offers, but it may mean shopping around a bit more and looking beyond the rates offered by your bank.”
Verona Frankish, CEO of estate agents Yopa, commented: “Sold prices are always the last indicator of market health to show improvement and so while they remain down, this certainly isn’t a sign of an impending market crash, more the final days of a previous period of stagnation.
“In fact, we’ve already seen evidence that the market is starting to improve and not only are buyers returning, but we’ve seen thousands of sellers return to the market already this year who previously failed to secure a buyer in 2023.
“With momentum building on both sides, it won’t be long before this uplift in activity helps to push sold prices in the right direction.”
