House Price Watch Dec 2023
House price growth slowed from 5% to -0.7% over the past year and transactions are likely to be 12% lower than 2019, the last 'normal' housing market benchmark. While house prices held relatively steady this month, activity and house prices are expected to remain subdued into 2024. Affordability remains stretched but with mortgage rates easing slightly, we may begin to see buyer confidence return. We are forecasting a -1% fall in house prices in 2024 as buyer affordability remains stretched.
Predictions for 2024 from the major indices
- Rightmove predicts that new seller asking prices will drop nationally by an average of 1% in 2024, with motivated sellers still needing to price below their local competition to secure a sale, as buyer affordability remains stretched.
- Nationwide says a rapid rebound in activity or house prices in 2024 appears unlikely. They expect house prices are likely to record another small decline or remain broadly flat (perhaps 0 to -2%) over the course of 2024.
- Halifax’s 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.
- Zoopla expects buyer affordability to improve over 2024 as incomes rise and house prices drift 2% lower over the year.
What’s happening nationally
House prices on average up +0.1% over the past month and down -0.7% over the past year.
Rightmove, reporting asking prices in December reports the biggest fall in house prices (-1.9%). Land Registry reporting November figures also indicates a fall in house prices (-0.8%), Nationwide reports stable prices, while Halifax reports a +1.1% increase in house price growth this month. Most of the indices report a fall in annual house price growth.
Indices based on:
Land Registry – registered property transactions in November.
Nationwide & Halifax – mortgage valuations in December.
Rightmove – asking prices posted on Rightmove in December.
*Rightmove is not included in the index average as the basis for its index is different (asking price vs agreed sale price)
| Index reports: | Monthly change | Annual change |
|---|---|---|
| Land registry | -0.8% | -2.1% |
| Nationwide | 0.0% | -1.8% |
| Halifax | +1.1% | +1.7% |
| Rightmove | -1.9% | -1.1% |
| Average change | +0.1% | -0.7% |
House prices in your area
Land Registry reported a fall in house prices in most areas over the past month with the biggest declines in the West Midlands (-3.1%), South West (-2.7%) and London (-2.2%).
In the past year, most regions in England and Wales experienced a fall in house prices. Annual house prices fell the most in London (-6%), the South West (-4.1%), West Midlands (-3.4%) and the East of England (-3.3%).
Average house prices remain highest in London (£505K) and lowest in the North East (£159K).
All types of properties have experienced a fall in house prices over the last year: Terraced (-3.8%), Flats/ maisonettes (-1.8%), Semi-detached (-1.7%) and Detached (-0.7%) according ot November Land Registry data.
| UK Region | Average price £ | Monthly change | Annual change |
|---|---|---|---|
| England | |||
| Nothern Ireland | |||
| Scotland | |||
| Wales | |||
| North West | |||
| Yorkshire and The Humber | |||
| North East | |||
| West Midlands | |||
| East Midlands | |||
| South West | |||
| East of England | |||
| South East | |||
| London |
| UK City | Average price | Annual change |
|---|---|---|
Market Monitor
There were 81K transactions in November, down -1.2% on October, 22% lower than November 2022. 81K transactions is in the lowest range we have seen in the last decade.
Demand continues to fall as do new instructions from sellers this month. Average stock per agent is down month on month.
Time to sell has increased sharply to 71 days up from 66 days last month and well above speed of sale last December (52 days).
How busy is the market?
- Not busy
- Normal
- Very busy
- Transactions down slightly in November, still at a ten year low
- Total transactions in November 81K
- -1.2% from last month
- -22% from November last year
Homes for sale vs homebuyers
- Good availability of homes
- Normal
- Shortage of homes
- Buyer enquiries down(-14% RICS); buyer demand continues to fall
- Seller enquiries down (-5% RICS); sales instructions continue to fall
- Average stock per agent 49; down from 52 last month (incl under offer/ Sold STC Rightmove)
Average speed of sale
- Fast
- Normal
- Slow
- 71 days to find a buyer, up from 66 days last month (up from 52 days last December, Rightmove)
What the experts say
Rightmove - agent's view
“Prices usually fall in December due to seasonal factors, but this month’s drop is bigger than the previous 20-year average of 1.5% as sellers get more competitive. We entered this year under a cloud of uncertainty, as the fallout from the Autumn mini-Budget filtered through to lower activity levels. High mortgage rates which have added to already-stretched buyer affordability have been a challenge throughout 2023 and this is likely to carry into next year. However, for now, there appears to be more calm and certainty heading into 2024, and the annual fall of 1.1% in asking prices highlights the market’s much-better-than-predicted resilience this year. Rightmove predicts that new seller asking prices will drop nationally by an average of 1% in 2024, with motivated sellers still needing to price below their local competition to secure a sale, as buyer affordability remains stretched.”
Nationwide
“UK house prices ended 2023 down 1.8% compared with December 2022, almost 4.5% below the all-time high in late summer 2022. Housing market activity was weak throughout 2023. The total number of transactions at c10% below pre-pandemic levels over the past six months, with those involving a mortgage down (c20%), reflecting the impact of higher borrowing costs. A borrower earning the average UK income and buying a typical first-time buyer property with a 20% deposit would have a monthly mortgage payment equivalent to 38% of take-home pay – well above the long run average of 30%. A 20% deposit on a typical first-time buyer home equates to c105% of average annual gross income. There have been encouraging signs for potential buyers recently, with mortgage rates edging down. Nevertheless, a rapid rebound in activity or house prices in 2024 appears unlikely. We expect house prices are likely to record another small decline or remain broadly flat (perhaps 0 to -2%) over the course of 2024.”
Halifax
“The housing market beat expectations in 2023 and grew by +1.7% on an annual basis. The average property price is now £4,800 higher than it was in December 2022. 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. That said, with mortgage rates continuing to ease, we may see an increase in confidence from buyers over the coming months. 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. 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.”
Zoopla (Hometrack)
“Annual house price inflation is -1.1%, down from +7.2% a year ago. House price falls are starting to moderate as sales improve. Market sentiment is improving due to rising incomes and an initial decline in mortgage rates. An increase in available supply, up a quarter on last year, is also boosting choice and supporting sales. Buyers and sellers are becoming more aligned on pricing, reducing the downward pressure on values. We expect the steady momentum in new sales that has developed over the final part of 2023 to continue into early 2024. While mortgage rates are edging lower, affordability remains a key challenge for mortgage-reliant households who are making home moving decisions. The modest decline in house prices over the year means UK housing still looks 10-15% overvalued at the end of 2023. We expect this position to improve over 2024 as incomes rise and house prices drift 2% lower over the year.”
