ONS House Prices

Data revealed on Wednesday that UK house prices declined in December, although the pace of decline notably slowed.

According to provisional estimates from the ONS, house prices dropped by 1.4% at the end of 2023, compared to a revised 2.3% decline in November.

On a seasonally-adjusted basis, prices saw a month-on-month increase of 0.3%.

The average UK house price stood at £285,000, down £4,000 from December 2022.

Factors such as higher interest rates, the cost of living crisis, and a surge in mortgage rates following then-prime minister Liz Truss’s controversial mini-budget have heavily impacted the UK housing market.

However, with inflation now at 4%, most analysts anticipate the Bank of England to initiate rate cuts later this year, potentially aiding the market as mortgage rates also start to decline.

“The official measure probably will tick down over the next couple of months, despite the recent rollover in mortgage rates, as it is based on completed sales financed with mortgages that were arranged several months beforehand,” said Gabriella Dickens, senior UK economist at Pantheon.

“We continue to expect a 5% peak-to-trough fall, though the risks appear to be skewed towards a smaller decline.

 

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