Government data from the UK House Price Index reveals a 1.4% year-on-year dip in house prices across the country, contrasting with a modest monthly increase of 0.1%, as disclosed in the December report released today.
As of December, the average property price in the UK stands at £284,691, marking a 1.4% decrease. Notably, London records the most substantial annual decline, with house prices falling by 4.8%, though monthly growth remains stagnant at 0%.
CEO of Open Property Group, Jason Harris-Cohen, comments on the latest figures, stating, “A monthly uplift in house prices during December, regardless of how marginal, is a very promising sign given the usual seasonal lull. This slight increase provides the first evidence that the mortgage market resurgence in both approvals and approval-based house price growth is starting to filter through to sold prices.” He adds that this signals the end of the brief house price correction.
Richard Harrison, Head of Mortgages at Atom Bank, acknowledges the expected 1.4% decrease in house prices for December, attributing it to a seasonal dip in asking prices before Christmas. He notes vendors becoming more competitive and adjusting prices to secure sales before the New Year. Harrison also suggests that higher mortgage rates and stretched affordability may have motivated buyers to offer below the asking price.
However, Harrison anticipates an upward trend in house prices as market confidence improves, supported by recent indicators. He mentions the festive period as a turning point, with over 10,000 new properties hitting the market on Boxing Day – the highest number since 2011, according to Rightmove.
Gareth Lewis, Managing Director of MT Finance, aligns with these views, expressing that the figures align with expectations of a flat market and a decrease in transactions leading to softened values. Lewis highlights the fluctuations in rates and product availability in the past year but notes a recent boost in consumer confidence, resulting in increased agent activity and more people exploring property transactions.
In conclusion, Lewis suggests that forthcoming data may show improved transactional volumes and increasing values, emphasizing the need for a balanced market to avoid rapid or excessive increases, allowing both buyers and sellers to engage in property transactions in a measured manner.