House prices begin to fall at a slower rate

House price declines are gradually easing as sales volumes increase across the UK. In October 2023, prices dropped by -1.4%, slowing to -0.8% by December.

The East of England (-2.5%) and the South West of England (-2.2%) experienced the most significant declines in 2023. In contrast, house prices in Northern Ireland increased by 3.2%. Despite this, higher mortgage rates are expected to persist, influencing house prices throughout 2024.

Data indicates that sellers are consistently reducing asking prices to attract buyer attention. More than 20% of sellers are now agreeing to discounts exceeding 10% of the initial asking price, and this figure rises to 25% in London and the South East of England. 

Prices have stalled for various reasons, including:

• tax alterations restricted property acquisition by investors and international buyers

• the Brexit vote impacted job growth • the pandemic closed cities which altered work patterns

• elevated mortgage rates disproportionately affected pricier housing markets.

It is unlikely that mortgage rates will fall significantly in the near future, staying within the 4% to 5% range.

Interestingly, Nationwide’s January index found that the average house price had increased by 0.7% during the month, a significant turnaround from the December figures.

Talk to us about your property finances.