Following the ONS House Price Index published today which showed that the average UK house price decreased by 1.2% in the 12 months to October 2023, with the average house price now £288,000. Nick Leeming, Chairman of Jackson-Stops, comments:

“Despite house prices easing month-on-month, the market should take some comfort in the challenges it has navigated in the past year. If we look back to October 2022, the Bank of England were on the cusp of raising the base rate to 3%, while the average UK house price was £291,000. Fast forward 12 months and the base rate is now 5.25% and the average house price is £288,000. With many having predicted house prices would fall 5% across the year, a minimal drop of just 1% is the clearest example of the property markets enduring strength despite riding the real estate rollercoaster.

“Looking ahead, predicting the market is like trying to read a 'Mortgage Mosaic' - a picture made of many different, tiny pieces, often driven by regional and economic nuance. Some may foresee a 'Garden of Growth', others, a 'Desert of Decline'. The truth? Probably a mix, a 'Patchwork of Plateaus' where some areas see growth while others experience a continued cooldown.

“What we expect to see is a minor reduction in property values overall next year, but no great dips as we have seen from 2023 the strength that underpins our bricks and mortar. Some house prices will be back in line with pre-pandemic levels, allowing for a fairer playing field for both buyers and sellers. With the prospect of interest rates going down next year and a greater pipeline of supply emerging in the spring, there is reason to expect a stronger market as the year progresses.

“However, the tides of 2024 will now definitely have to ride out a General Election, which could be as early as May. This may prompt more buyers and sellers to sit and wait, with pre-election uncertainty often impacting domestic economic confidence. It is important that throughout the year, sellers continue to accept realistic valuations, reflecting a market that has greater competition once again.

“Overall, in the grand tapestry of the housing market, it is the diverse threads of lifestyle choices and circumstances that keep the wheels of the market in motion, likely to create a steady stream of transactions throughout 2024, akin to levels seen in pre-2020.”