Annual UK house prices fell at the end of 2023, London worst hit

British house prices fell by 1.4 per cent on an annual basis in December, after a revised 2.3 per cent decrease in November.

London was the region with the biggest annual decrease with prices in the capital falling by 4.8 per cent, the Office for National Statistics (ONS) said on Wednesday.

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

Wednesday's data contrasted with some other measures of Britain's housing market which showed house prices rose in January as demand picked up after mortgage rates fell.

Other reports on the data indicated UK house prices rose for the first time in four months at the end of last year.

The average price of a home rose to £284,691 (€333,813) in December, a 0.1 per cent rise compared to the previous month.

The figures suggest the housing market may be past the worst after a marked cooling in mortgage rates in recent months. More forward-looking industry data from lenders Halifax and Nationwide Building Society have already pointed to prices rebounding.

The ONS said prices fell 1.4 per cent in the 12 months to December, with the market defying predictions of a slump triggered by 14 back-to-back interest-rate rises by the Bank of England. It was still the worst year for the property market since 2008 when the financial crisis triggered a 15 per cent decline.

“December saw demand pick up as mortgage rates decreased and 2024 has started with a tsunami of enthusiasm and enquiries from potential homebuyers,” said Stephen Perkins, managing director at broker Yellow Brick Mortgages.

“Though this data shows prices are down on an annual basis, it paints a picture of how the market was several months previously, and the picture now is really quite different.” – Reuters, Bloomberg