The UK housing market in 2023 presents a complex picture, with a general downturn in prices but notable exceptions in certain areas. The past year has seen a significant decrease in average house values, a trend expected to continue into 2024. This dip in prices is primarily due to soaring mortgage costs, impacting both homeowners and potential buyers. The Office for Budget Responsibility forecasts a further 4.7% decrease in house prices next year.

Regions Defying the Trend

Despite this overall decline, certain UK regions have experienced a surprising surge in property values. Lancashire and the East Midlands have emerged as top performers, with house prices in some areas increasing by over 5%.

Methodology of Analysis

The analysis by Hamptons International, using Office for National Statistics data, offers an insight. They compared the average transaction prices from January to September 2023 with the same period in 2022, focusing on more than 30 local authorities.

The Top Performers

East Lothian: A Coastal Haven

East Lothian, bordering Edinburgh, tops the list with a remarkable 10.3% increase in house prices. The area’s appeal lies in its unique microclimate and diverse lifestyle options, ranging from coastal living to the charm of historic villages. Despite the national market’s challenges, East Lothian has shown resilience and growth.

Fylde, Lancashire: Seaside Attraction

Fylde in Lancashire, known for its proximity to multiple seaside towns, has seen a 7.7% increase in house prices. The area is particularly popular among retirees, who are less affected by mortgage rate hikes.

Other Notable Areas

West Lancashire, along with several North-West England regions like Lancaster, Preston, and Rochdale, have also seen significant price increases. The average property value in the North-West, at £218,013, remains relatively affordable.

In the East Midlands, areas like Amber Valley, Harborough, and Broxtowe have experienced over 6% growth. Rutland, known for its quaint country living, has seen a 7.6% increase.

A Southern Exception: West Oxfordshire

Contrary to the general downtrend in southern England, West Oxfordshire recorded a 6.5% growth, attributed to its rural appeal and good infrastructure.

Areas Facing Declines

Conversely, parts of Southern England and Scotland have seen the most significant drops in house prices. Aberdeen and areas in London like Kensington and Chelsea have experienced substantial decreases. This shift is partly due to northern regions catching up in terms of price growth.

The Impact of Rising Borrowing Costs

The increase in mortgage costs has particularly affected London and its commuter belt, where property values are higher and thus more susceptible to interest rate fluctuations.

Future Predictions

Savills anticipates that homes in London will see a 4% value decrease in 2024, with a slower decline in the North-West and East Midlands. This trend is expected to continue until 2027, with more affordable areas like Wales and Scotland likely to see significant price increases.