House prices in England and Wales plummet by 4.1% in October

The housing market in England and Wales suffered a blow in October as the average house price fell by 4.1%, or £15,700 to £362,777, according to the latest data from e.surv Acadata house price index.

This is the biggest monthly decline since August 2009, when the market was recovering from the banking crisis of 2007/2010.

The negative trend has been ongoing for almost 14 months, from a peak growth rate of 12.7% in August 2022.

The annual price change in October 2023, for both mortgage and cash house purchases, was an average of -4.1%, down from -3.4% in September 2023.

The current average house price is close to the level seen in February 2022 – that’s 21 months ago.

‘Support prices from any seismic fall’

Richard Sexton, a director at e.surv, said: “Notwithstanding this decrease we see from cash and mortgaged sales data, we can safely say the continued lack of supply will continue to support prices from any seismic fall.

“There are also significant regional differences within the headline data.”

He pointed to the North East seeing the smallest price fall over the last 12 months at -1.5%, relegating Yorkshire and the Humber to second place.

He said: “When we look more closely at London, the two boroughs with the highest rise in prices in September were the second and third most expensive boroughs in London, being the City of London, at +5.1% and the City of Westminster, at +3.6%.

“Despite the current dip in property prices, the market is supported by a robust labour market and improving affordability.

“Furthermore, the upcoming Autumn Statement could support sales volumes and pricing in the coming months if the government introduces supportive measures for both ends of the market, such as stamp duty relief for downsizers and assistance for first-time homebuyers.”

Mortgage transactions are still trailing 2022 levels

The survey also revealed that mortgage transactions are still trailing 2022 levels, indicating a lack of demand and confidence in the market.

However, some hot spots remain with house prices in City of Westminster up by 13.6%, showing the resilience of the prime central London area.

The report attributed the fall in house prices to several factors, such as the end of the stamp duty holiday, the increase in interest rates and uncertainty over Covid-19.

Despite the recent price falls, the report noted that most homeowners are still likely to have gained considerable equity in their property over this period, as house prices have increased by nearly £47,600 since the start of the pandemic.

The e.surv Acadata house price index reflects the true inflation of house prices by using every residential property transaction in England and Wales as its data source.

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