UK house prices plunge at the fastest pace in 13 years

UK house prices plunge at the fastest pace in 13 years

0:02 AM, 18th January 2024, About 5 months ago

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The UK property market saw the average house price drop by 2.1% in the year to November, data from the Office for National Statistics (ONS) reveals.

This was the third month in a row that house prices declined, and the steepest annual fall since 2011.

The ONS said that the average house price in the UK was £285,000 in November, down by £6,000 from a year ago.

On a monthly basis, prices fell by 0.4%, after adjusting for seasonal factors.

House prices fell in most parts of the UK

The regional breakdown shows that house prices fell in most parts of the UK, with London experiencing the biggest drop of 6% year-on-year, the fastest since 2009.

The average house price in the capital was £505,000, the highest in the country, but down by £32,000 from the year previously.

In England, the average price was £302,000, down 2.9%, and in Wales prices fell 2.4% to £213,000.

However, house prices in the North East of England fell by just 0.4%.

House prices rise in Scotland

The only region that saw an increase in house prices was Scotland, where the average price rose by 2.2% year-on-year to £194,000.

All types of properties saw a fall in price, the ONS says, with terraced houses recording the largest decline of 3.8% year-on-year, followed by flats with a 1.8% drop.

The average price of a terraced house was £209,000, while the average price of a flat was £237,000.

‘House price falls accelerated in November’

The head of personal finance at Hargreaves Lansdown, Sarah Coles, said: “House price falls accelerated in November, as they endured the steepest drop in 13 years.

“It reflects just how dire things were at the tail end of the summer, when so many of these sales were agreed.

“While mortgage rates have fallen in the months since, we’re not out of the woods yet. The market still faces some serious challenges, which could pull prices even lower.”

She added: “Mortgage rates reached a peak in August, and many buyers struggled to be able to borrow as much as they needed.

“Over this period, sales ground to a halt, so an awful lot of sellers were forced to cut their prices in order to shift their home.

“Even as prices fell, buyers sat on their hands, and the RICS survey showed that buyers were still thin on the ground in November.”

‘Air of positivity hanging over the UK property market’

Marc von Grundherr, a director of Benham and Reeves, said: “There’s been an air of positivity hanging over the UK property market for a number of months now and this is unlikely to evaporate due to a marginal decline in sold prices.

“Not only is there a seasonal influence at play with today’s figures, but what we’re seeing is a return to the norm following a pandemic inspired period of house price boom.”

He added: “The market is currently finding its feet as buyers adjust to the reality of higher mortgage rates, while sellers are also having to adjust their expectations and as the two meet in the middle, we expect the market to stabilise.”

The chief executive of Open Property Group, Jason Harris-Cohen, said: “The market has stood fairly firm over the last year despite wider economic turbulence, but we’re yet to see any improvement in property values and it may be some time before we do.

“Higher interest rates are still dampening buyer sentiment and not only is it taking far longer for sellers to secure a buyer in a proceedable position, but the path to completion is also taking considerably longer.

“So, while home sellers entering the market may still secure a good price, those looking to sell their home quickly are likely to be disappointed.”

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