HOUSE prices remain high across the UK with the average property price standing at £294,559 – but could they fall?
Average UK house prices soared by 9.5% in the year to September, according to the ONS.
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Property prices had surged due to pent-up demand following coronavirus, a lack of homes on the market driving demand up and the end to the stamp duty holiday.
But house prices saw the biggest monthly fall since June 2020 in November, according to Nationwide.
The average house price in November was £263,788, Nationwide added.
It came after Halifax said house prices fell by 0.4% in October with mortgage rates peaking.
The house price slowdown followed mortgage rates hitting a 14-year high in September.
This was caused by political and economic turmoil following former Chancellor Kwasi Kwarteng’s mini-Budget.
An increase in mortgage rates has meant people thinking about buying homes are holding off, which in turn sees house prices drop.
And millions of households now face bigger bills after the Bank of England (BoE) hiked interest rates to their highest level in 14 years.
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It comes amidst the cost of living crisis with households already contending with increased energy bills and food prices.
Are house prices likely to go down in 2023?
Experts are predicting house prices will continue to fall over the coming months as increased mortgage rates keep potential buyers off the market.
Nick Morrey, technical director at mortgage brokers Coreco, said house prices may fall by up to 10% over the next year.
“A fall in prices after two very strong years and the cost of living rising was anticipated,” he said.
“We can expect this to continue through into 2023 but settle down as the year progresses.”
This will be good news for first-time buyers wanting to get onto the ladder, but with mortgage rates higher than before it might be harder to get approved for one.
Most people will see a drop in the value of their home, raising fears of households falling into negative equity.
This is when a house or flat is worth less than when you took out a mortgage on it.
But because prices have gone up so much in recent years, this probably won’t be the case.
Despite recent drops in house prices, year-on-year they’re still up.
