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

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Huge hikes in mortgage charges failed to offer UK home costs a lift or fall on the finish of 2023, Nationwide has stated.

The typical worth of a house was £257,443 in December, in response to the lender, which confirmed no change from the earlier month.

This implies home costs within the UK finish the 12 months 1.8 per cent cheaper than they’d been on the finish of 2022, and 4.5 per cent under the all-time peak in the summertime of 2022.

England noticed the largest drop in costs, down 2.9 per cent in comparison with a 12 months in the past.

Costs fell probably the most quickly in East Anglia, down 5.2 per cent year-on-year. Costs usually fell quicker within the south of England than within the north, in response to the forecasts.

However regardless of the autumn in England and Wales – the place home costs dropped 1.9 per cent – home costs rose by 4.5 per cent in Northern Eire and in Scotland they had been up 0.5 per cent.

“Housing market exercise was weak all through 2023,” Nationwide’s chief economist, Robert Gardner, stated.

“The full variety of transactions has been working at (about) 10 per cent under pre-pandemic ranges over the previous six months, with these involving a mortgage down much more (about 20 per cent), reflecting the influence of upper borrowing prices.

“On the flip facet, the amount of money transactions has continued to run above pre-Covid ranges.”

It comes as the price of borrowing has elevated dramatically during the last two years, with the Financial institution of England’s base rate of interest rising from 0.1 per cent in December 2021 to five.25 per cent as we speak.

Mr Gardner stated: “A speedy rebound in exercise or home costs in 2024 seems unlikely.

“Whereas value of residing pressures are easing, with the speed of inflation now working under the speed of common wage development, shopper confidence stays weak and surveyors proceed to report subdued ranges of latest purchaser inquiries.

“Furthermore, whereas markets are projecting that the subsequent financial institution fee transfer shall be down, there are nonetheless upward dangers to rates of interest. Inflation is declining, however measures of home worth pressures stay far too excessive.”