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Official: UK house prices fell to £285,000 in 2023

Official: UK house prices fell to £285,000 in 2023
Christina Hoghton
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Christina Hoghton

The average house price fell £4,000 in a year, according to official figures.

The Office for National Statistics said that average property prices fell to £285,000 during 2023, a drop of 1.4 per cent.

Prices fell 0.3 per cent between November and December.

In London, average prices fell further, by 4.8 per cent, to reach £508,000.

Despite the widespread falls, new-build property prices continued to rise, by 9.4 per cent over the year.

Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “2023 was a tough year for property, but there was a glimpse of hope as it drew to a close. House prices were still falling, but those drops decelerated after mortgage rates were cut.

“As cheaper deals hit the market at the start of 2024, optimism became more widespread, and some buyers were persuaded back to the market. However, it’s vital that buyers and sellers don’t get dazzled by this flash of hope.

“The fall in mortgage rates has stalled, and two-year rates have crept back up very slightly to 5.63%. Robust wage growth and higher services inflation means the Bank of England won’t be in a rush to cut rates, so mortgage prices could rise further as the market digests the fact we may not get rate cuts until the second half of 2024.”

Richard Harrison, head of mortgages at Atom bank, added: “The news of a 1.4 % decrease in house prices in December will come as little surprise.

“A seasonal dip in asking prices is always expected in the lead-up to Christmas, and the final month of 2023 saw vendors becoming increasingly competitive, reducing their pricing in the hope of closing a sale before the New Year.

“Likewise, higher mortgage rates and stretched affordability for some buyers may have motivated them to offer below the asking price, in a bid to offset the impact of higher borrowing costs.

“More recent indicators point to increasing house prices as confidence in the market improves, and we should see this reflected in future ONS data.”