Prospective buyers were keen to read the latest house price data from ONS last week – could house prices really be falling and by how much? We took a closer look to find out more.
· Average UK house prices grew by 9.8% in the year to December 2022 (a drop from +10.6% in November 2022).
· The average UK house price was £294,000 in December, a whopping £26,000 higher than a year ago but small £2,000 drop from November's record high.
· Average house prices still vary greatly across the UK, standing at £315,000 in England, £222,000 in Wales, £187,000 in Scotland, and £175,000 in Northern Ireland.
· Of all English regions, the East Midlands saw the highest percentage change in the year to December 2022 (12.3%), while London saw the lowest (6.7%).
After falling by an average of£2,000 in January, how far could house prices drop?
· In December, Halifax predicted house prices to fall by 8% in 2023, citing the ‘more challenging economic environment.
· This would put the average UK property back at asimilar valuation to April 2021.
· Nationwide joins Halifax in sharing expectations of a ‘modest decline’ in 2023 house prices of around 5%.
· The Office for Budget Responsibility (OBR)forecasts UK house prices to drop 9% between Q4 2022 and Q3 2024.
· Important to remember that average UK house prices grew by 9.8% in the year to December 2022, making a potential fall of 9%a return to December 2021 levels.
All in all, many are in agreement that the UK housing market is stabilising. There are indications that house prices may be readjusting from the high level we have come to expect as normal since 2020. Coupled with this is falling inflation, leading to suggestions that the Bank of England’s base rate could have peaked. Taken together, there are various positive signs that the market is returning to a more consistent level on all fronts.
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