UK House Price Index Released

The Government has just published the UK House Price Index, which can be seen in full here.

In summary, headline statistics for December 2023:

Average Price of Property in the UK: £284,691
Annual Price Change for Property in the UK: -1.4%
Monthly Price Change for Property in the UK: 0.1%
Monthly Index Figure (January 2015 = 100) for the UK: 149.3

Economic Statement:

Average UK house price annual inflation was negative 1.4% in the 12 months to December 2023.
Average UK house price was £285,000 in December 2023, £4,000 lower than 12 months ago.
Average house prices decreased in England to £302,000, decreased in Wales to £214,000, and increased in Scotland to £190,000.
Northern Ireland saw an increase in average house prices to £178,000 in the year to Q4 (Oct to Dec) 2023.
Annual house price inflation was highest in the North West, with prices increasing by 1.2%, and lowest in London, where prices decreased by 4.8%.
Various reports indicate a decrease in buyer demand but a stable trend in new instructions over the month.
Mortgage approvals for house purchases increased to 50,500 in December 2023 from 49,300 in November 2023.

Price Changes:

Average house prices in the UK decreased by 1.4% in the 12 months to December 2023.
Scotland saw the highest annual house price percentage change of 3.3%.
England, Wales, and Northern Ireland experienced decreases in average house prices.
Average Price by Country and Government Office Region:

England had an average price of £302,164 with a monthly change of 0.2% and an annual change of -2.1%.
Scotland had an average price of £190,341 with a monthly change of -0.9% and an annual change of 3.3%.
Wales had an average price of £213,816 with a monthly change of 0.9% and an annual change of -2.5%.
Northern Ireland (Quarter 4 – 2023) had an average price of £177,611 with a monthly change of -0.9% and an annual change of 1.4%.

Average Price by Property Type (December 2023):

Detached: £447,076
Semi-detached: £280,024
Terraced: £232,113
Flat or maisonette: £224,757
All: £284,691

These statistics provide an overview of the property market in the UK for December 2023.

The January 2024 UK HPI will be published at 9:30 AM on Wednesday 20 March 2024.

Trade comments

Anna Clare Harper, CEO of sustainable investment adviser GreenResi, says: “In nominal terms (before inflation), house prices are down by 1.4% annually in the year to December 2023. This reflects a lag in sentiment, which is increasingly positive. The volume on talk of house prices having ‘hit the bottom of the market’ is getting louder.

“However, back in December it’s easy to see why pricing was softer than a year before. Higher interest rates are meant to, and do calm demand to buy things, including homes, down. They also have a disproportionate impact on affordability for homeowners and potential homeowners reliant on mortgages.

“Demand from mortgaged property owners fell, but 36% of homes are owned without mortgages. This is the largest part of the housing market and it acts as an anchor, keeping pricing stable when other investments get stormy. What’s more, the supply of homes is constrained. As a result, a significant house price crash remains very unlikely.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “These figures are even more interesting this month, not just because they include mortgaged and cash transactions unlike others, but because they reflect activity when the market was experiencing seasonal and pre-mortgage rate reduction jitters.

“The resilience demonstrated at that time has continued since. Lower-than-expected and now stabilising inflation is improving prospects of further base rate cuts which will give buyers and sellers another boost.”

Gareth Lewis, managing director of property lender MT Finance, says: ’”These are the figures we were expecting, with a flat market and decrease in transactions resulting in softening values. It is no surprise given fluctuating rates and product availability last year.

“Since then we have seen more consumer confidence, which has meant agents are busier, people are looking to transact and having conversations about buying and moving.

“As the next set of data comes through, we should see transactional volumes improve and values edge up as ultimately there is more demand. What we don’t want to see is values go too high or too fast – the market needs a period of relative calm so that buyers and sellers can get back to transacting property in a measured way.

“The inflation data is encouraging as it was expected to creep up but for it to stay the same, given the timing and after Christmas when people were spending money, that’s a good place to find ourselves in. Hopefully, inflation will continue to edge downwards. Swap rates are ticking upwards so lenders are pulling products but this is partly down to them returning to the market at the start of the year wanting to fill pipelines and pricing quite aggressively. Hopefully, Swaps will settle which will help with desire and confidence to transact.”