House prices end year 1.8% lower as East Anglia faced biggest drop in UK

Massive hikes in mortgage rates failed to give UK house prices a boost or fall at the end of 2023, Nationwide has said.

The average price of a home was £257,443 in December, according to the lender, which showed no change from the previous month.

This means house prices in the UK end the year 1.8 per cent cheaper than they had been at the end of 2022, and 4.5 per cent below the all-time peak in the summer of 2022.

England saw the biggest drop in prices, down 2.9 per cent compared to a year ago.

Prices fell the most rapidly in East Anglia, down 5.2 per cent year-on-year. Prices generally fell faster in the south of England than in the north, according to the forecasts.

But despite the fall in England and Wales – where house prices dropped 1.9 per cent – house prices rose by 4.5 per cent in Northern Ireland and in Scotland they were up 0.5 per cent.

The housing market has been more subdued in 2023 than it was last year when it hit all-time highs

(PA Wire)

“Housing market activity was weak throughout 2023,” Nationwide’s chief economist, Robert Gardner, said.

“The total number of transactions has been running at (about) 10 per cent below pre-pandemic levels over the past six months, with those involving a mortgage down even more (about 20 per cent), reflecting the impact of higher borrowing costs.

“On the flip side, the volume of cash transactions has continued to run above pre-Covid levels.”

It comes as the cost of borrowing has increased dramatically over the last two years, with the Bank of England’s base interest rate increasing from 0.1 per cent in December 2021 to 5.25 per cent today.

Mr Gardner said: “A rapid rebound in activity or house prices in 2024 appears unlikely.

“While cost-of-living pressures are easing, with the rate of inflation now running below the rate of average wage growth, consumer confidence remains weak and surveyors continue to report subdued levels of new buyer inquiries.

“Moreover, while markets are projecting that the next Bank Rate move will be down, there are still upward risks to interest rates. Inflation is declining, but measures of domestic price pressures remain far too high.”

Credit
1: https://www.independent.co.uk/news/business/house-prices-nationwide-forecast-mortgage-rates-b2470796.html

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