House prices fell slightly in 2023, and some experts predict further reductions could follow this year.
The latest data from the Land Registry shows an annual fall of 1.4%, with the average UK house price standing at just under £285,000 in December. While this isn’t far off the all-time high of £292,000 recorded in September 2022, prices have been trending downwards rather than upwards.
Here, Which? analyses what’s happening to house prices according to other indices including Nationwide, Halifax, and Rightmove, and explains what might come next.
How have house prices changed?
The Land Registry’s UK House Price Index is the most reliable barometer of what’s happening to house prices, as it’s based on actual property sales rather than asking prices. It works on a two-month lag, so the most recent figures are for December.
The Land Registry says the average price of a property in the UK dipped by 1.4% between December 2022 and 2023.
In the 12 months prior, house price growth soared by 9.8% – so there has been a marked slowdown in growth over the past year.
There is a gap of £93,000 between the average price paid by first-time buyers and those who are already on the housing ladder in England:
- First-time buyer: £252,000
- Home mover: £345,000
Average house prices over time
- Find out more: best mortgage rates – check how rates compare for first-time buyers, home movers, and those looking to remortgage
How do other house price indices compare?
As well as Land Registry data, there are several other property price indices that indicate what’s going on with house prices.
The portal Rightmove provides the most up-to-date figures, but they’re based on asking prices set by sellers rather than confirmed sales. Nationwide and Halifax also publish their own monthly data, based on mortgage lending.
All three indices found that house prices are now rising slightly month-on-month.
- Find out more: best mortgage lenders
House price changes by region in December 2023
Price changes vary from region-to-region and country-to-country.
Land Registry data shows the majority of areas recorded monthly price decreases in December.
London (4.8%) and the South East of England (4.6%) experienced the biggest falls in 2023.
Source: UK House Price Index, 14 February 2024. Monthly data is not available for N. Ireland, figures are released each quarter.
How many homes are being sold?
There was a marked drop-off in housing transactions last year, and the market remains slow.
The most recent data from HMRC shows that an estimated 82,000 transactions went through in January 2024, a hefty drop of 12% compared to January 2023.
The graph below shows how numbers have fluctuated over the past three years.
- Find out more: the cost of selling a house
Has the property market been slowing down?
Demand from buyers has fallen over the past 12 months, which has caused the housing market to cool off.
Estate agent trade body Propertymark says that the number of buyers registering with estate agents in January was up marginally year-on-year, but remained well below January 2022.
A slower market means buyers hold the upper hand when negotiating a purchase price. Data from Zoopla shows sellers are most commonly reducing their asking prices by 5% or more in the South East and East of England.
Rightmove says sellers are taking an average of 78 days to secure a buyer. That’s a significant increase from the 62 days recorded back in January last year.
- Find out more: why isn’t my house selling?
How long does it take to sell a property?
What will happen to house prices?
Lenders and property portals predict that house prices will fall this year, but that huge drops are unlikely.
- HSBC and Nationwide predict prices will remain broadly the same.
- Rightmove and Zoopla forecast drops of 1% and 2% respectively.
- Halifax predicts prices will fall by between 2% and 4%.
However, we have already seen one change of mind. The estate agency Knight Frank predicted a 4% drop in its original forecasts in October, but now predicts a 3% rise. It puts this down to inflation and mortgage rates falling more quickly than anticipated.
Is it possible to get a good mortgage deal?
Mortgage rates have dipped in the last six months, but the Bank of England’s decision to freeze the base rate in early February has resulted in some lenders increasing their rates slightly.
For the latest information, check out our guide on the best mortgage rates.
If you’re coming up to the end of your fixed term, our story on what to do if you need to remortgage offers advice on your options.
Finally, if you’re struggling to make your current repayments, see our guide on what to do if you can’t pay your mortgage.
This story is regularly updated with the latest house price index figures and expert views. The last update was on 29 February 2024.
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