Halifax reports that average UK house prices fell 1.5% in December, the fourth monthly drop in a row, pulling annual growth down to 2%
The impact of last September’s mini-Budget is working its way through the housing market, says Tom Bill, head of UK residential research at Knight Frank.
Bill adds that the annual rate of house price inflation (+2% in December) appears likely to turn negative soon:
“The first rule for anyone predicting the trajectory of house prices in 2023 should be to ignore any data from the chaotic final quarter of 2022. The latest data shows two things are happening at the same time.
First, the effect of the mini-Budget is working its way through the system, which means that monthly declines are narrowing. At the same time, an annual fall in house prices appears imminent, underlining how the lending landscape has changed irrespective of the mini-Budget. As rates normalise, buyers will increasingly recalculate their financial position and house prices will come under pressure. We expect a 10% decline over the next two years, taking them back to where they were in mid-2021.”
