- Average UK home worth fell by 1.4% within the 12 months to December
- Prices in West Lancashire up 9.8% whereas some London areas noticed 10%-plus drops
House costs formally fell final 12 months, in accordance with the most recent figures from the Office of National Statistics.
The ONS revealed the common UK home worth slipped 1.4 per cent within the 12 months to December, because the mortgage crunch took its toll on property gross sales.
It means the standard dwelling misplaced £4,000 in 2023, with the common offered worth coming in at £285,000.
But some areas suffered a lot greater declines, with six English native authority areas seeing home worth falls of 10 per cent or extra.
Meanwhile, others bucked the development with 9 seeing property costs climb by 5 per cent of extra.
It’s formally down: The ONS revealed the common UK home worth fell by 1.4 per cent within the 12 months to December
The ONS figures are extensively considered as probably the most complete and correct home worth index. This is as a result of this report by the UK’s official statisticians makes use of Land Registry knowledge and relies on common offered costs. However, this additionally means its knowledge lags behind different indexes.
A geographical break up emerged final 12 months within the UK when it got here to property costs.
England and Wales noticed typical offered costs fall by 2.1 per cent and a couple of.5 per cent respectively within the 12 months to December.
However, in Scotland and Northern Ireland common costs truly rose by 3.3 per cent and 1.4 per cent.
Across the nation’s areas, home worth modifications ranged from a 4.8 per cent decline in London and a 4.6 per cent fall within the South East, to an increase of 1.2 per cent within the North West and a slight 0.3 per cent achieve within the West Midlands.
But there have been a lot larger variations between native authorities.
This stresses the all vital level – the property market does not transfer as one, however includes 1000’s of localised markets, all behaving in a different way.
For instance, common costs in West Lancashire rose by a staggering 9.8 per cent final 12 months, with the standard dwelling rising from £230,000 to £253,000.
In the City of London, common home costs fell by 17.8 per cent from £975,289 to £802,000.
Where home costs fell most in 2023
| Local authorities | Dec-23 | Dec-22 | Difference |
|---|---|---|---|
| City of London | £802,168 | £975,289 | -17.8% |
| City of Westminster | £877,733 | £1,046,255 | -16.1% |
| Kensington and Chelsea | £1,125,353 | £1,304,255 | -13.7% |
| Gosport | £229,869 | £259,878 | -11.5% |
| Tunbridge Wells | £423,528 | £477,396 | -11.3% |
| Hammersmith and Fulham | £664,767 | £743,420 | -10.6% |
| Welwyn Hatfield | £399,510 | £441,496 | -9.5% |
| Runnymede | £437,283 | £481,693 | -9.2% |
| Surrey Heath | £424,318 | £466,601 | -9.1% |
| Fenland | £224,704 | £246,976 | -9% |
| Reading | £301,827 | £331,544 | -9% |
| Waltham Forest | £468,598 | £514,854 | -9% |
| Torridge | £302,716 | £332,194 | -8.9% |
| Tonbridge and Malling | £412,308 | £451,674 | -8.7% |
| Stevenage | £318,143 | £347,098 | -8.3% |
| Southampton | £231,895 | £252,397 | -8.1% |
| Hartlepool | £123,829 | £134,277 | -7.8% |
| Hyndburn | £120,181 | £130,321 | -7.8% |
| Lincoln | £173,939 | £188,530 | -7.7% |
| South Holland | £225,338 | £243,857 | -7.6% |
| Watford | £371,851 | £402,609 | -7.6% |
Some of the worst performing housing markets are to be present in London. Prices within the capital fell on common 4.8 per cent within the 12 months to December.
Average home costs in The City of London (the capital’s historic monetary district) are down a whopping 17.8 per cent, in accordance with the ONS, whereas the City of Westminster is down 16.1 per cent. Prices in Kensington and Chelsea are additionally down 13.7 per cent.
The ONS cautions in opposition to studying an excessive amount of into figures for very small transaction areas, such because the City of London, as they are often skewed by a number of gross sales.
Outside of the capital, Gosport on the south price noticed an 11.5 per cent decline in home costs. Some common commuter hotspots additionally suffered, with home costs falling 11.3 per cent in Tunbridge Wells, 9.5 per cent in Welwyn and Hatfield, 9.2 per cent in Runnymede and 9.1 per cent in Surrey Heath.
Where home costs rose most in 2023
| Local authorities | Dec-23 | Dec-22 | Difference |
|---|---|---|---|
| West Lancashire | £252,836 | £230,222 | 9.8% |
| Rossendale | £219,537 | £203,543 | 7.9% |
| Winchester | £537,592 | £498,449 | 7.9% |
| Mole Valley | £614,527 | £571,723 | 7.5% |
| Warwick | £383,319 | £361,594 | 6% |
| South Hams | £449,131 | £425,175 | 5.6% |
| Broxtowe | £260,965 | £247,506 | 5.4% |
| Ribble Valley | £283,911 | £269,421 | 5.4% |
| Wychavon | £359,023 | £341,017 | 5.3% |
| Cumberland | £178,108 | £170,209 | 4.6% |
| Newcastle upon Tyne | £199,817 | £191,065 | 4.6% |
| Chorley | £240,897 | £231,698 | 4% |
| Stafford | £275,341 | £264,902 | 3.9% |
| East Cambridgeshire | £357,263 | £344,166 | 3.8% |
| Manchester | £242,523 | £233,566 | 3.8% |
| Worthing | £363,946 | £350,994 | 3.7% |
| Stockton-on-Tees | £167,883 | £162,227 | 3.5% |
| Redcar and Cleveland | £161,024 | £155,798 | 3.4% |
| East Devon | £366,303 | £354,729 | 3.3% |
| North Tyneside | £209,692 | £203,217 | 3.2% |
| Preston | £163,251 | £158,359 | 3.1% |
| Richmond upon Thames | £757,676 | £735,740 | 3% |
| Amber Valley | £236,426 | £229,663 | 2.9% |
| Lichfield | £325,580 | £316,460 | 2.9% |
North West areas had been sturdy performers final 12 months, with the main native authority space West Lancashire posting a 9.8 per cent rise in home costs.
Prices within the borough of Rossendale within the North West of England additionally rose by 7.9 per cent final 12 months, in accordance with the ONS.
Interestingly, earlier this week, Rossendale was additionally rated as the most well liked property market of 2023 by Zoopla.
The property web site revealed that some 44.2 per cent of houses there rose in worth by 5 per cent or extra final 12 months – which is greater than some other native authority.
At the opposite finish of the nation, Winchester and the Mole Valley, within the South, noticed home worth good points of seven.9 per cent and seven.5 per cent.
Will home costs rise or fall in 2024?
The ONS says common home costs truly elevated by 0.1 per cent between November and December final 12 months.
This appears reasonably constructive provided that common costs fell 0.8 per cent throughout the identical interval 12 months in the past.
Last week we heard from two separate reviews that the housing market could also be heating up with growing numbers of individuals trying to purchase or promote.
The newest property market survey by the Royal Institution of Chartered Surveyors (Rics) confirmed that property brokers and surveyors are seeing rising numbers of purchaser enquiries in addition to extra sellers coming to market.
Meanwhile, Rightmove revealed a report variety of owners contacted an property agent to get their dwelling valued in January.
Jonathan Hopper, CEO of Garrington Property Finders says: ‘The reset is rapidly shifting in direction of a restoration.
‘Crucially we’re beginning to see extra inventory come onto the market as individuals who delayed their shifting plans final 12 months resolve that now’s the time to behave earlier than costs decide up pace once more.
‘The restoration stays tentative, however there’s a rising sense that 2023’s worth reset is over, and that final 12 months’s widespread worth falls in England and Wales have made many areas higher worth.’
The renewed confidence from patrons has come alongside mortgage charges falling from their peak late final summer season, with huge cuts arriving within the new 12 months.
Nicky Stevenson, managing director at nationwide property agent group Fine & Country provides: ‘House costs completed the 12 months down in comparison with 2022, because the hole between what sellers would settle for and patrons would pay for a house narrowed.
‘However, the small uptick in costs in December lends credibility to the suggestion that the property market is in a a lot more healthy place general than it was at the beginning of final 12 months.’
Many inside the property business imagine that mortgage charges have now reached ranges that can encourage patrons and residential movers again into the market.
Although common mounted mortgage charges stay simply above 5 per cent, in accordance with Moneyfacts, the most affordable offers are actually beneath 4 per cent.
There can also be now extensive expectation that mortgage charges could fall additional because the 12 months progresses.
Jonathan Hopper says: ‘As the price of borrowing edges down, houses have gotten extra reasonably priced.
‘With shopper inflation caught at double the Bank of England’s goal, rates of interest could come down extra slowly than many had hoped, however final 12 months’s trickle of patrons has already became a stream.’
Stevenson provides: ‘Expectations are that charges may fall in some unspecified time in the future this 12 months, which is able to widen affordability and encourage extra demand.
‘Today’s information that inflation held at 4 per cent will enhance hopes that rates of interest might be minimize before anticipated.
‘The Bank of England has additionally reported three consecutive month-to-month will increase in mortgage approvals as momentum builds within the housing market.
‘This pent-up demand from patrons who paused or held off on their property search means there may be rising exercise in the marketplace.’
Mortgage lenders have been reducing charges since August when common two year-fixed fee reached a peak of 6.85 per cent and common five-year mounted charges hit 6.37%
Another issue that will assist home costs is the actual fact the variety of new houses deliberate by housebuilders fell by virtually half final 12 months.
Interestingly, the common worth of a offered new construct rose by 9.4 per cent in 2023, in accordance with the ONS figures.
A scarcity of provide of recent houses will doubtless assist assist costs additional, in accordance with Anthony Codling, head of European housing and constructing supplies for funding financial institution RBC Capital Markets.
He provides: ‘Today’s ONS knowledge confirms that 2023 was not the 12 months of the home worth crash and with falling inflation, falling mortgage charges and rising wages we doubt {that a} crash will are available in 2024, and the current phrases spoken, and actions taken by housebuilders confirms our view the housing market is wanting up reasonably than down to this point this 12 months.
‘The scene is about for a restoration, and we’ve got our fingers crossed that any strikes taken by politicians this election 12 months will assist reasonably than hinder the housing market restoration.’