"Usually we would see a quieter few weeks in the immediate run-up to Christmas, but buyers have pleasantly surprised us by remaining very active."
- Kevin Roberts, managing director of Legal & General Mortgage Services
Average UK house prices decreased by 1.2% in the 12 months to October, down from a decrease of 0.6% in the year to September, according to the latest UK House Price Index from the ONS and Land Registry.
Average house prices over the 12 months to October decreased by -1.4% in England, -3.0% in Wales, but increased by 0.2% in Scotland and 2.1% in Northern Ireland.
The North East was the only English region which saw an increase in average house prices in the 12 months to October (0.2%), while London saw the largest fall (-3.6%).
On a seasonally adjusted basis, the average UK house price decreased by 0.3% in October, following a month-on-month decrease of 0.7% in September. On a non-seasonally adjusted basis, prices fell by 0.7% following a month-on-month decrease of 0.7% in September.
Nathan Emerson, CEO Propertymark, commented: “Throughout 2023 higher interest rates have affected mortgage affordability, which has been a contributing reason why prices dropped in the 12 months to October. Propertymark’s latest Housing Insight Report found that there has been a 13% decrease in the number of potential homebuyers registered at each member branch. Though the Bank of England has said it has no intention to raise interest rates for now by keeping them at 5.25%, the UK Government should further focus on the task of slashing inflation to meet the Bank of England’s target of 2%. Interest rates will likely fall in the long-term, thereby reducing borrowing costs for homeowners, and we should finally see market confidence return to what is was prior to Covid-19.”
Richard Harrison, head of mortgages at Atom Bank, said: “The latest data demonstrates that, while the market may be challenging, this is still very much a softening of pricing rather than the property crash that some had predicted this year. We’ve seen Rightmove predict that prices will fall by an average of 1% next year. It’s important to remember that within this nationwide forecast there will obviously be regional differences, with some areas performing better than others, however the overall picture of a relatively flat market should entice more buyers early next year as they look to get ahead of any potential future increases.
Kevin Roberts, managing director of Legal & General Mortgage Services, added: “UK house prices have ended the year on a stronger footing and the outlook for pricing is much more optimistic now compared to this time last year where doomsayers were predicting a drop of around 10%. In reality, the fall has been around half that, or less in some regional cities like Bristol, where roughly two-thirds of properties on the market in certain postcodes are currently under offer. House prices are very closely linked to interest rates, which have settled considerably as the year has gone on, dropping for twenty weeks on the bounce.
"Usually we would see a quieter few weeks in the immediate run-up to Christmas, but buyers have pleasantly surprised us by remaining very active. The market remains price-sensitive, but there are good deals to be found, particularly if guided by a qualified adviser.”
