The recent data from the Halifax house price index indicates a consistent upward trend, with a 1.1% increase in average house prices recorded in December. This marks the third consecutive monthly rise, contributing to an overall growth of 1.7% in property prices throughout 2023. The typical UK home is now valued at £287,105, reflecting a modest increase of just over £3,000 from the previous month.
However, despite these positive figures, the Halifax remains cautious, predicting a potential decline of 2.0 to 4.0 per cent in house prices for the current year. This projection anticipates regional variations, with the south-east of England expected to bear the most significant downward pressure. As the market continues to evolve, sellers and buyers alike are advised to navigate these fluctuations with a discerning eye on the broader economic landscape.
Northern Ireland remains a stronghold in the UK property market, displaying a robust annual growth of 4.1% in house prices. The average property value in the region has climbed to £192,153, marking a noteworthy increase of £7,595 compared to the same period in December 2022. This upward trajectory positions Northern Ireland as a notable leader in the real estate landscape, showcasing resilience and sustained value appreciation.
Similarly, Scotland’s housing sector demonstrates positive momentum, with the average house price now standing at £205,170. This reflects a commendable 2.6% annual growth, equivalent to a £5,277 increase in cash terms. The North West and Yorkshire and Humber regions also experienced moderate but positive trends, witnessing modest house price increases of 0.3% and 0.1%, respectively, over the past year. As these regions contribute to the diverse dynamics of the UK property market, the nuanced patterns of growth underline the varying strengths and opportunities within the broader real estate landscape.
The South East experienced the most significant decline in 2023 compared to other UK regions, with homes selling at an average of £376,804—a decrease of 4.5% amounting to £17,755. Meanwhile, London maintains its position as the region with the highest average house price, reaching £528,798, although it recorded a 2.3% annual decline.
Kim Kinnaird, Director of Halifax Mortgages, notes that the housing market exceeded expectations in 2023, exhibiting a 1.7% annual growth. The average property price has seen a rise of £4,800 since December 2022. These regional variations highlight the diverse trends shaping the UK housing landscape, with fluctuations in both the South East and London influencing the overall market dynamics.
“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 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 2.0 and 4.0 per cent during the coming year, although, as with recent years, forecast uncertainty remains high given the current economic climate.”