The UK housing market has registered its first annual fall in house prices since April 2012. The latest data from the Office for National Statistics (ONS) shows a 0.1% decrease in average house prices nationwide over the year to September. This decline marks a shift in the market, which saw prices drop significantly from late last year and reach a low in March 2023. Prices had been on an upward trend until September when they fell again by 0.5%, bringing the average house price in the UK to £291,000.
This trend in house prices varied across regions, with the North East witnessing a 1.6% increase, contrasting with a 1.6% decrease in the South West. London had the highest average price at £537,000 but also saw a year-on-year decline of 1.1%. Across different property types, detached houses were the exception, recording a price increase of 0.6%, whereas terraced houses suffered the most, with a 1.5% decrease.
Sarah Coles, head of personal finance at Hargreaves Lansdown, reflected on the market’s dynamics: “The long-awaited drop in house prices has finally materialised. The market has proved incredibly resilient in the face of overwhelming headwinds, but mortgage rate hikes over the summer dealt the final blow, pushing prices into negative territory.”
Gareth Atkins, Managing Director of Lettings at Foxtons, commented on the London market, noting a typical decrease in renter registrations in October but a promising 12% increase in rental instructions, suggesting landlord confidence in London’s appeal.
Sarah Tonkinson, from Foxtons, remarked on the London lettings market’s return to regular seasonal trends, with a Q4 decrease in demand but a continued quick letting of properties at the right price.
Jonathan Samuels, CEO of Octane Capital, highlighted the influence of the lowest inflation in two years on the property market, which has shown signs of resilience in recent months.
Verona Frankish, CEO of Yopa, discussed early indications of market stabilization due to a freeze on interest rates, with potential impacts on buyer confidence and seller prices.
Marc von Grundherr, Director of Benham and Reeves, projected a brighter future for the property market, despite sold prices not showing significant movement and higher borrowing costs.
Chris Hodgkinson, Managing Director of House Buyer Bureau, expressed optimism for the market’s direction, suggesting a stable outlook and increased buyer activity.
Tom Francis, Residential Director at Woods Hardwick, commented on the consistent performance of new-build properties and the potential surge in buyer activity from expected stamp duty incentives.