UK house prices to fall by 1.8% in 2023

Normal

The biggest annual decline since 2008

British house prices fell 1.8% in the 12 months to December, the biggest one-year fall since 2008 during the global financial crisis, mortgage firm Nationwide said on Friday.
A Reuters poll of economists pointed to a 1.4% decline.
On a monthly basis, prices remained stable in December compared to November. “The average price of a house now stands at £257,443 (US$328,650), which is 4.5% below its peak in the summer of 2022,” Nationwide said.
Higher borrowing costs
The housing market in Britain, which boomed during the Covid-19 pandemic, was hit by rising borrowing costs after the Bank of England raised interest rates in a battle to control inflation.
But a decline in mortgage interest rates in recent weeks has led to signs that the market may be bottoming out.
“Housing market activity remains weak through 2023,” said Robert Gardner, Nationwide's chief economist.
Nationwide data showed home prices fell 1.8% year-over-year in December, after a 15.9% decline in December 2008.
He added, “A rapid recovery in housing activity or prices next year is unlikely.”
“If the economy slows and mortgage rates gradually moderate, as we expect, home prices may decline slightly further or be broadly flat (perhaps less than 2%) in 2024,” Gardner said.
He pointed to low consumer confidence, low levels of buyer inquiries among home surveyors and the risk of higher interest rates due to continued inflationary pressures.
Nationwide said: “While house prices fell across most of the UK this year, only Northern Ireland and Scotland recorded a record rise.” (agencies)