Have house prices gone up recently?
Or are they actually slipping further away from the peak levels recorded back in November 2022?
Well, it’s tricky to keep up with what’s really going on in the housing industry. However, some recent statistics have indicated that, despite the hearsay, property prices have in fact remained relatively stable over the summer.
Here’s a quick look at the state of the property market as of November 2023, and what we might expect as we glide into the New Year.
Taking a closer look
According to The Land Registry’s UK House Price Index – which is the most accurate measure available and is based purely on sale prices (not asking prices) – average prices rose by 0.2% between August 2022 and August 2023. In the 12 months prior to that, there was a significant 14% spike in house price values, largely thanks to the volatility caused by the coronavirus pandemic and the mad rush to take advantage of the stamp duty holiday (if you remember, stamp duty rates eventually returned to normal on 1st October 2021).
Inevitably, what goes up must come down – and this is what experts have been the most afraid of. Depending on who you talk to, the bubble is already starting to burst. Rightmove reckons that the year-on-year change is -0.8%, while mortgage analysis from Nationwide and Halifax tells a more damning story: that house prices dropped by 5.3% and 4.7% respectively in the year to September 2023.
Analysing the data by region
Perhaps it’s more useful to look at regional data. This recent article from Which? contains a handy table that outlines exactly just how much property prices have changed across the country, both monthly and annually. As the writers have pointed out, it’s interesting that properties in the North East are currently coming in at less than the average price for the whole of England. London and the East of England are the hardest hit in terms of price decline, while in the North East, Yorkshire and Humber, the West Midlands and the South West, the markets have remained buoyant.
Exploring the bigger picture
It’s important to look at other indicators as well as price trends. For example, the number of property purchases made in 2023 (so far) has dropped sharply compared to 2022. Demand from buyers has cooled off, which has led to a much quieter and more stagnant market than we’ve been used to since we entered the ‘20s.
On top of this, according to Rightmove, it’s taking sellers a lot longer to secure a buyer than previously. Vendors are currently having to wait an average of nearly 2 months to progress to a sale, whereas in September last year, the wait time was typically just 37 days.
Throw the cost-of-living crisis into the mix, and the stats above make even more sense. People do, of course, always need somewhere to live – but first-time buyers and home movers who are facing the soaring interest rates and record building costs of recent times are understandably reluctant to part with their cash. The kinds of increases we’ve seen across the board recently reduce the affordability of getting onto the property ladder and make it difficult to justify a big move unless it’s absolutely necessary.
What does this mean for 2024 and beyond?
We know from our own experiences that the start of 2023 was tough for many estate agents, which of course had a knock-on effect on mortgage advisors like us.
We have had some signs of an encouraging, if not slow, recovery – but the analysts at Capital Economics aren’t feeling quite so optimistic, predicting a fall in house prices of 12% by the middle of 2024.
Bear in mind, this is a forecast only. Throughout 2023, it seems our housing market has defied the odds and proven to be more resilient than many experts thought. There’s every chance that the data for 2024 will look more favourable than the analysts are suggesting.
Our advice? Keep an eye on what’s happening, and make sure your move remains affordable for you and your family.
Our mortgage brokers can help you determine how much you can feasibly put towards your new purchase, as well as keep you up to date with the latest developments from the industry so you can plan your next move with confidence.