November brought an unanticipated twist for the UK housing market, as house prices nosedived by 4.6%. This drop marks a significant turn, following a steady 15-month decline from a peak growth of +12.7% in August last year. The Acadata House Price Index, which covers completed home transactions in England and Wales, whether bought with cash or mortgages, has now hit its lowest point in 17 years.

The Current State of Housing Costs

The decrease in house prices is not just a yearly phenomenon. In November 2023 alone, the average house price fell by around £2,500, a decrease of 0.7%. This downturn has brought the average house price back to levels last witnessed in January 2022. According to Richard Sexton, director at e.surv, the average sale price for homes in England and Wales now stands at £358,337, a steep drop from previous figures.

More Than Meets the Eye

Despite the overall downturn, the situation is more complex than it first appears. While the average figures paint a picture of decline, the reality varies across different regions. For instance, in the North West and North East, house prices have actually seen slight increases of 0.5% and 0.3%, respectively. In contrast, areas like Yorkshire and the Humber experienced the most significant price drop of 1.2%.

Autumn Statement

The Autumn Statement, a key financial announcement by the government, didn’t offer much solace to the housing market. Sexton noted that while hopes were high, the statement lacked substantial measures to rejuvenate the market. With an eye on inflation and a potential election in the Spring of next year, more decisive actions might be reserved for the March 2024 Budget.