Average UK house price at end of last year £4,800 higher than at end of 2022 – index

The housing market “beat expectations” in 2023, with the average UK property price at the end of the year £4,800 higher than it was at the end of 2022, according to an index.

Real estate prices increased by an average of 1.7% in 2023, Halifax said.

In December, average home prices rose 1.1% from the previous month, marking the third consecutive monthly increase.

The average UK house price in December 2023 was £287,105, up from £282,305 in the same month a year earlier.

Kim Kinnaird, director of Halifax Mortgages, said: “The value of the average UK home rose for the third consecutive month in December to £287,105, up 1.1% or £3,066 on November, reaching its highest level since March. 2023 year.

“The housing market beat expectations in 2023, growing by 1.7% year-on-year. The average property price is now £4,800 higher than it was in December 2022.

“While it is encouraging that we have seen growth in the last three months of the year, this was preceded by falling property prices for six consecutive months between April and September. The growth we are seeing is more likely due to a shortage of real estate on the market than strong buyer demand.

“However, if mortgage rates continue to decline, we may see an increase in buyer confidence in the coming months.”

She continued: “As we move towards 2024, the UK property market will continue to reflect wider economic uncertainty and buyers and sellers are likely to be cautious when considering making a move.

“Although wage growth is now outpacing inflation, helping to ease cost-of-living pressures for some and improving housing affordability, interest rates are likely to remain elevated as long as inflation remains well above the Bank of England's target.

“Our latest forecast shows that house prices could fall between 2% and 4% over the next year, although, as in recent years, uncertainty about the forecast remains high given the current economic climate.”

While house prices rose in some parts of the UK last year, property values ​​fell in others.

The message also states that in Northern Irelandhouse prices rose by 4.1% year-on-year, while in the south east of England they fell by 4.5%.

Many lenders are reducing fixed mortgage rates in the new year.

Mark Harrischief executive of mortgage broker SPF Private Clients, said: “Increased competition among lenders is driving down mortgage rates and we are in the midst of a price war.

“With HSBC announcing a five-year fixed rate of 3.94% and discounts from Halifax, NatWest, BSE and other creditors, the gloves are really off.”

Riz Malik, founder of Southend-on-Sea-based broker R3 Mortgages, told the Newspage website: “We should get clarity on the borrowing environment for 2024 in the coming weeks as lenders rush to adjust rates in response to economic conditions. While it may take some time, optimism is expected to return sharply among potential movers.”

Nicky Stevenson, managing director of estate agents group Fine & Country, said: “If mortgage lenders continue to cut rates as they compete for business, more first-time buyers could soon return, helping to restore growth in this part of the market as well.”

Nathan Emerson, chief executive of property developer Propertymark, said: “We now hope that the Bank of England will gradually start to cut interest rates to further stimulate the housing market.”

Alice Hayne, personal finance analyst at Bestinvest, said: “While confidence is returning to the UK property market, it is still very early days.

“Borrowing costs remain significantly higher than they were before the Bank of England started raising interest rates in late 2021, so there is still a risk of rising mortgage debt.”

Matt Thompson, head of sales at London estate agency Chestertons, said: “December is usually a quieter time of year in terms of property deals, but last month buyers were more motivated to keep looking. Laid-back demand caused by last year's economic uncertainty was the main reason for this surge in buying activity and suggests that the property market will be quite active in 2024.”

Here are UK average house prices and annual changes in December 2023, according to Halifax. Regional annual change figures are based on approved mortgage transactions for the past three months:

East Midlands, £234,578, minus 2.6%

East Anglia, £325,634, minus 3.5%

London, £528,798, minus 2.3%

North Eastern, £168,274, minus 0.9%

North West, £226,765, 0.3%

Northern Ireland, £192,153, 4.1%

Scotland, £205,170, 2.6%

South East, £376,804, minus 4.5%

South West, £293,067, down 3.9%

Wales, £216,730, minus 0.5%

West Midlands, £247,122, down 1.4%

Yorkshire and Humber, £204,904, 0.1%