UK house prices drop more than £12k since August

house price The red brick Victorian row houses of Muswell Hill with panoramic views across to the skyscrapers and financial district of the city of London.
The average UK house price is now around £12,500 below its peak in August last year. Photo: Getty

The average UK house price remained largely unchanged in January at £281,684, after four months of falls.

The average sale price stood at £281,684 in January, down barely from £281,713 in December, according to lender Halifax.

Property values increased by 1.9% annually, the lowest level recorded over the past three years.

“We expected that the squeeze on household incomes from the rising cost of living and higher interest rates would lead to a slower housing market, particularly compared to the rapid growth of recent years," Kim Kinnaird, director of Halifax Mortgages, said.

"As we move through 2023, that trend is likely to continue as higher borrowing costs lead to reduced demand."

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The average house price is now around £12,500 below its peak in August last year, though it still remains some £5,000 higher than in January 2022, the figures show.

“For those looking to get on or up the housing ladder, confidence may improve beyond the near-term. Lower house prices and the potential for interest rates to peak below the level being anticipated last year should lead to an improvement in home buying affordability over time,” Kinnaird added.

Wales saw its rate of growth fall to 2% – from 6 in December – with an average house price of £210,275.

The South West of England has also seen annual house price growth slow, now at 2.7%, with an average house price of £298,853, dipping below £300,000 for the first time since March last year.

In Northern Ireland and Scotland, the pace of annual growth eased more slowly. Those buying a home in Northern Ireland will now pay an average of £183,935, while in Scotland average properties now cost £197,784.

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London saw the cost of buying an average home fall from £541,472 to £530,396 in January, with annual house price inflation flat compared to +2.9% in December.

The price of a typical London home is still around a quarter of a million pounds above the UK national average.

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