The Office for National Statistics (ONS) published their monthly House Price Index for December 2023. Here’s our summary.

As we wrapped up 2023, the landscape of the UK housing market showed a blend of highs and lows, with changes varying significantly across different regions.

The Big Picture – A General Slowdown

The overall trend for the UK was a slight decline in house prices. On average, house prices fell by 1.4% in the year leading up to December 2023. This was a bit of an improvement from November, where prices had dropped more steeply by 2.3%. In real terms, what this meant for homeowners and potential buyers was that the average house price in the UK stood at £285,000 in December, showing a £4,000 decrease from the year before.

Interestingly, the rate of decline has slowed when we compare these figures to the dramatic 13.8% annual inflation seen in July 2022, signaling a cooling off from those heady days.

Regional Highlights – Winners and Losers

The situation varied greatly across the UK:

• England saw an average price decrease of 2.1% to £302,000.
• Wales wasn’t far behind, with prices dropping by 2.5% to £214,000.
• Scotland, on the other hand, bucked the trend with a 3.3% increase, bringing the average house price to £190,000.
• Northern Ireland also saw growth, with average prices up by 1.4% to £178,000 in the last quarter of 2023.

In England, the regional differences were stark:

• The North West emerged as the top performer with a modest annual price increase of 1.2%.
• London, despite remaining the most expensive place to buy a house in the UK at an average of £508,000, saw the most significant drop in prices, with a 4.8% decrease.
• The North East remained the most affordable region, with an average house price of £158,000.

Monthly Changes – A Slight Recovery

December 2023 brought a glimmer of hope with a small month-on-month increase in house prices:

• On a seasonally adjusted basis, prices went up by 0.3%, following a decrease of 0.7% in November.
• Without seasonal adjustments, there was a slight 0.1% increase, after a more significant fall of 1.1% the month before.

Property Transactions Decrease

The volume of residential transactions also took a hit, with December 2023 seeing an 18% drop compared to the same time in 2022, and a 1% decrease from November 2023, with 80,420 transactions recorded. This suggests a cooling market, with fewer people buying or selling homes towards the year’s end.

Understanding the Trends

What does all this mean for the average person looking to buy or sell a home in the UK? For starters, the market is showing signs of stabilising after the rollercoaster ride of the past few years. Buyers in Scotland and Northern Ireland might find themselves facing slightly higher prices, reflecting a demand in those areas. In contrast, those in England and Wales may benefit from the general decrease in prices.

However, London’s significant drop, combined with its status as the priciest region, underscores the capital’s unique market dynamics, which often diverge from national trends.