House Prices Increase Overall in 2023
UK house prices saw an overall increase of 1.7% in 2023, with the average property price rising by 1.1% in December alone.
The average cost of a UK home is now £287,105, which is £3,066 more than the previous month, reaching the highest price point since March 2023.
However, the outlook for 2024 is cautious, with predictions suggesting a potential decrease in house prices ranging from -2% to -4%.
Kim Kinnaird, director at Halifax Mortgages, commented: “The housing market surpassed expectations in 2023, growing by 1.7% annually. While it’s encouraging to see growth in the last three months of the year, this followed six consecutive months of property price falls between April and September. The growth is likely driven by a shortage of properties on the market rather than the strength of buyer demand.”
Northern Ireland and Scotland experienced the strongest growth, with property prices in Northern Ireland rising by 4.1% to £192,153. In contrast, the South East saw the sharpest decline, with an average price drop of 4.5%, equivalent to £17,755.
Despite a decrease in annual prices, London maintains the highest average house price in the UK at £528,798, although it has seen a 2.3% fall over the year.
Kinnaird added: “As we move through 2024, the UK property market will continue to reflect wider economic uncertainty, and forecast uncertainty remains high given the current economic climate.”
Reaction Sofia Jones, managing director at London-based independent mortgage broker, Penny House:
“2023 was the most challenging year for borrowers that I have seen, with interest rates shooting up quickly. However, November and, to a greater extent, December saw confidence rebound sharply as mortgage rates came down in earnest. That was no ordinary December.
“The acute increase in demand was reflected by Rightmove’s record traffic figures on Boxing Day.
“January has kicked off with numerous rate cuts from lenders, and agents are busy with buyers.
“In my opinion, we will see a relatively short window for these buyers looking to get a good deal, and it will soon be a sellers’ market again.
“The lack of supply is definitely a key factor in supporting prices, but demand is now back, too. The end of 2023 was the polar opposite of the beginning, and I’m optimistic for the market in 2024.”