Average UK house price dipped by £4,000 over year to December 2023 – ONS

The average UK house price fell by around £4,000 in the 12 months to December 2023, according to official figures.

The typical house price in December 2023 was £285,000, marking a 1.4% decline over 12 months, the Office for National Statistics (ONS) said.

Property values fell annually by 2.1% in England and by 2.5% in Wales.

House prices increased annually by 3.3% in Scotland and by 1.4% in Northern Ireland.

Within England, house prices in the North West recorded the highest annual percentage increase over the 12 months to December 2023 (1.2%), while London had the biggest fall in house prices (falling by 4.8%).

The West Midlands was the only other English region to record an annual increase in house prices, at 0.3%.

Aimee North, head of housing market indices at the ONS, said: “Our initial estimate of UK house prices shows another annual fall in December, however the pace of decrease has slowed since the previous month.

“Our latest figures also show a return to annual price growth for two English regions: the North West and West Midlands.

“Meanwhile the annual rise in UK private rental prices remains unchanged at a record-high level for the second consecutive month.”

The ONS said private rental prices paid by tenants in the UK rose by 6.2% in the 12 months to January 2024, unchanged for the second consecutive month.

The annual rate represents the joint-highest annual percentage change since the records started in January 2016.

Annual private rental prices increased by 6.1% in England, 7.0% in Wales and 6.8% in Scotland in the 12 months to January 2024.

The 6.8% increase in Scotland is the highest annual rate since the Scotland data started in January 2012.

Rents in London increased by 6.9% annually – representing the joint-highest annual percentage change since London records started in January 2006.

Richard Harrison, head of mortgages at Atom bank, said: “The final month of 2023 saw vendors becoming increasingly competitive, reducing their pricing in the hope of closing a sale before the new year.

“Likewise, higher mortgage rates and stretched affordability for some buyers may have motivated them to offer below the asking price, in a bid to offset the impact of higher borrowing costs.”

The ONS also said on Wednesday that inflation held steady last month, as food prices fell for the first time in almost two-and-a-half years.

Consumer Prices Index (CPI) inflation remained unchanged at 4% in January, lower than the 4.2% that economists had forecast, although still double the Bank of England’s 2% target.

Nathan Emerson, chief executive of property professionals’ body Propertymark, said: “When the housing market has been through a disruptive period like it has over the last three years, it normally leads to a drop in house prices as people cannot afford homes in the same way they can during a period of economic growth.”

Marc von Grundherr, director of estate agent Benham and Reeves, said: “The decline in house prices seen during the latter stages of 2023 has been marginal in the grand scheme of things and they remain there or thereabouts when compared to the record peaks seen during the pandemic market boom.”

Nick Leeming, chairman of estate agent Jackson-Stops, said: “Across the Jackson-Stops network, quarter four saw an average of eight buyers for each available property, which demonstrates the supply challenges that are still underpinning market forces for those committed to moving.

“While the extremes of the pandemic property period have been firmly left behind, the reality of a more balanced picture has positioned the market well for a steadier start to 2024.

“In January across our network, we have started to see a modest buzz from buyers reigniting their searches, buoyed by greater clarity on mortgage rates and easing affordability.”

Rosie Hooper, a chartered financial planner at Quilter Cheviot, said: “The small mortgage rate increases of this week will take a while to feed through in the market and may end up being a flash in the pan.

“If so, the outlook for 2024 still carries a hint of optimism. The ongoing competition among lenders and serious lack of housing supply is likely to keep house prices buoyant and if and when interest rates are cut, it’s likely the property market will be off to the races again.”

Jonathan Hopper, chief executive of Garrington Property Finders, said: “Crucially we’re starting to see more stock come on to the market as people who delayed their moving plans last year decide that now is the time to act before prices pick up speed again.”