UK house prices rise in 2023 – but are set to fall in 2024

UK house prices rise in 2023 – but are set to fall in 2024

9:42 AM, 5th January 2024, About 6 months ago 1

Text Size

The UK’s house prices rose by 1.1% in December – the third month of consecutive growth – and showed a surprise annual rise of 1.7%, Halifax reveals.

The current average cost of a house is £287,105, which is an increase of £4,800 compared to the previous year, and the highest since last March.

According to Halifax, house prices look set to fall between 2% and 4% this year.

Regionally, Northern Ireland leads with the most robust annual growth at 4.1%, while the South East of England saw prices drop by 4.5%.

The figures from Halifax are at odds with Nationwide which, this week, said that house prices in 2023 fell by 1.8%.

‘Housing market beat expectations in 2023’

The director of Halifax Mortgages, Kim Kinnaird, said: “The housing market beat expectations in 2023 and grew by +1.7% on an annual basis.

“Whilst it’s encouraging that we saw growth in the last three months of the year, this was preceded with property price falls for six consecutive months between April and September.

“The growth we have seen is likely being driven by a shortage of properties on the market, rather than the strength of buyer demand.”

She added: “That said, with mortgage rates continuing to ease, we may see an increase in confidence from buyers over the coming months.”

Scotland saw property prices rise by 2.6% to £205,170, while prices in the South East fell most sharply to an average of £376,804 – that’s £17,755 lower.

‘Buyers and sellers are likely to be naturally cautious’

Ms Kinnard continued: “As we move through 2024, the UK property market will continue to reflect the wider economic uncertainty and buyers and sellers are likely to be naturally cautious when considering making a move.

“While wage growth is now above inflation, helping to ease cost of living pressures for some and improving housing affordability, interest rates are likely to remain elevated for as long as inflation remains markedly above the Bank of England’s target.

“Our latest forecast suggests house prices could fall between -2% and -4% during the coming year, although, as with recent years, forecast uncertainty remains high given the current economic climate.”

House prices rise again – enjoy it while it lasts

Sarah Coles, the head of personal finance at Hargreaves Lansdown, said: “December brought more good news for sellers, with prices up during the month, and the average property gaining £4,800 in a year.

“There’s good news on the way for the next few months too, as lower mortgage rates boost buyer enthusiasm.

“However, there’s every chance that a tough 2024 could test buyers to breaking point, and prices may well fall over the year.”

She adds: “Prices defied all expectations, posting a positive return in 2023, after a shortage of properties on the market encouraged prices higher.

“This doesn’t mean a sales bonanza, because buyers are still thin on the ground, and property is shifting very slowly.”

‘We simply don’t anticipate the market to decline in 2024’

Yopa’s chief executive, Verona Frankish, said: “While monthly house price growth is widely considered too erratic a measure to demonstrate improving market health, there’s now no doubt that the market is heading in the right direction.

“Not only have house prices climbed for three consecutive months, but both the quarterly and annual rates of growth have also increased despite an extremely testing year for the market.

“With rates currently frozen and expected to fall, we simply don’t anticipate the market to decline in 2024 having already weathered the worst of the storm.”

The director of Benham and Reeves, Marc von Grundherr, said: “A clean sweep of positive house price growth in December could be considered somewhat of a Christmas miracle given the turbulent year 2023 turned out to be.

“However, those of us on the front lines have been observing a growing level of market momentum for some months now and so it was always a question of when, not if, this started to boost market health where house price growth is concerned.”

He added: “The property market has once again demonstrated its resilience in the face of economic uncertainty and while challenges still remain, you’d be ill-advised to predict a fall in property values over the coming year just a few short days into January.”

Share This Article


Cider Drinker

10:28 AM, 5th January 2024, About 6 months ago

I prefer to use the ONS data which should be available in a couple of weeks.

Of course, the real figure should include inflation. An annual rise of 1.7% is still a fall when inflation is factored in to the equation. The fall is more than many landlords’ net rent for the year. Of course, there will also be regional variations.

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership


Don't have an account? Sign Up

Landlord Tax Planning Book Now