The typical price of a house has fallen at its quickest charge for greater than 12 years, with UK property values sitting sometimes £6,000 decrease in November 2023 than a 12 months earlier, based on official figures.
Home costs fell by 2.1% over the 12 months to November 2023 to achieve £285,000 on common, the Workplace for Nationwide Statistics (ONS) mentioned.
Aimee North, head of housing market indices on the ONS, mentioned: “The annual fall in home costs continues to speed up, with the common price of a house falling at its quickest charge for over 12 years.
“In the meantime annual lease will increase stay at report ranges throughout the nation.”
Home costs sometimes fell throughout the 12 months in England and Wales, however elevated in Scotland and Northern Eire.
Common home costs over the 12 months to November 2023 decreased in England to £302,000 (a 2.9% drop) and fell in Wales to £213,000 (down 2.4%).
The everyday property worth elevated in Scotland to £194,000 (a 2.2% annual rise).
Common home costs elevated by 2.1% yearly in Northern Eire to £180,000.
Inside England, the North East recorded the smallest lower in common home costs within the 12 months to November 2023 (falling by 0.4%), whereas London noticed the largest drop in common home costs (down by 6.0%).
The figures had been launched because the ONS recorded a shock enhance in inflation.
The speed of Shopper Costs Index (CPI) inflation accelerated to 4% in December, from 3.9% in November, however many economists had anticipated the speed to edge decrease.
There are additionally issues over the impression of the Crimson Sea delivery assaults on inflation, because it threatens to push up the price of oil, fuel and items being imported to the UK.
Mortgage charges have been falling in latest weeks, with many lenders beginning the brand new 12 months by chopping charges. However some housing market consultants mentioned the acceleration in inflation might imply lenders are extra cautious, as expectations of a Financial institution of England base charge minimize are pushed again.
Frances McDonald, director of analysis at property brokers Savills, mentioned: “Right now’s ONS home worth index for November signifies that stretched mortgage affordability continued to position downward strain on home costs within the ultimate weeks of 2023.
“Wanting forward, there are encouraging indicators that patrons are gaining confidence as mortgage charges fall, although at this time’s shock inflation figures might push out expectations of a Financial institution of England base charge minimize.”
Mark Harris, chief govt of mortgage dealer SPF Personal Purchasers, mentioned: “The downwards charge battle continues to select up momentum though there is no such thing as a assure that mortgage charges will preserve tumbling. There are certain to be blips as it’s nonetheless fairly unstable on the market, as at this time’s inflation figures counsel.
“Swap charges, which underpin the pricing of fixed-rate mortgages, have been falling over the previous month however ticked up at this time on the again of the inflation information.”
He added: “Whereas the speed trajectory is on the entire downwards, debtors have to be conscious that in the event that they just like the look of a charge it won’t be round for lengthy.”
Matt Smith, Rightmove’s mortgage knowledgeable, mentioned: “Common (mortgage) charges had been falling fairly sharply, however that is doubtless this to gradual as lenders take a extra cautious method over the following few weeks. The massive image continues to be constructive for mortgage charges, with charges extra steady and enticing for movers than a 12 months in the past.”
Nick Leeming, chairman of property agent Jackson-Stops, mentioned: “The figures printed at this time counsel a frosty finish to the 12 months, with patrons placing their searches on maintain with a purpose to see how mortgage charges would react as inflation fell as soon as once more. 2023 was outlined by mortgage affordability pressures and a shift from immense competitors, in the direction of a smaller, extra dedicated purchaser pool.”
Ross McMillan, proprietor at Glasgow-based Blue Fish Mortgage Options, advised web site Newspage: “Sentiment reigns supreme within the housing market, and in Scotland it’s very constructive at current.
“While a modest uptick in inflation might create a level of uncertainty, it’s essential to recognise that purchaser enthusiasm and exercise have skilled a noticeable revival within the opening weeks of 2024.”
Andrew Montlake, managing director at UK-wide dealer Coreco, advised Newspage: “These within the mortgage market will likely be watching swap charges carefully and it might imply a slight pause to the brand new 12 months charge wars we’ve got seen, however competitors between lenders is unlikely to wane.”
Simon Gerrard, managing director of London-based Martyn Gerrard property brokers, mentioned: “On the bottom, it’s clear the market has turned a nook. We’ve seen a 20% enhance in individuals registering to purchase a house in comparison with this time final 12 months.”
The ONS additionally mentioned personal rental costs paid by tenants within the UK rose by 6.2% within the 12 months to December 2023.
This was unchanged from the annual proportion change within the 12 months to November 2023, and the joint-highest annual proportion change because the UK information began in January 2016.
Rents in Scotland elevated by 6.3% within the 12 months to December 2023 – the best annual charge because the Scotland information began in January 2012.
In England, personal rental costs elevated by 6.1% within the 12 months to December 2023, which was unchanged from the annual proportion change in November.
When London is excluded from the England figures, personal rental costs elevated by 5.7% within the 12 months to December 2023. The ONS mentioned the figures are the joint-highest annual proportion modifications because the information began in January 2006.
Personal rental costs in London elevated by 6.8% within the 12 months to December 2023, down barely from a record-high rise of 6.9% within the 12 months to November 2023.
Rents in Wales rose by 7.1% within the 12 months to December 2023, edging down from a report excessive enhance of seven.3% within the 12 months to November 2023.
Personal rental costs in Northern Eire elevated by 9.3% within the 12 months to October 2023.
The annual charge for Northern Eire has typically slowed since a latest peak of 10.0% within the 12 months to March 2023. Knowledge for Northern Eire lags behind the remainder of the UK, the report mentioned.