The UK housing market defied earlier predictions in 2023, with the market showing far greater resilience than many expected.

Quite the opposite to earlier predictions made when it was envisaged for there to be a sharp decrease in property values as a result of the cost of mortgage borrowing, property prices actually concluded the year with an insignificant variation compared to 12 months earlier, in December 2022.

Regional Disparities

House prices in southern areas of England saw the largest decline on average compared to those in the north of England. Despite the disparity, the average cost of a home in the UK decreased by only 1.8%, sinking to £257,443.00 – some 4.5% below the peak value recorded in the summer of 2022.

In the F+A’s property finding team experience, regional disparities have seen some areas unaffected, with demand outstripping supply – specifically in the search for single storey homes – and in many cases areas of high appeal seeing little demand. Properties within the “Golden Triangle” or Yorkshire or Cheshire for example still sees strong sales prices, with many areas unaffected in the last 12 months.

In one case in 2023, one of F+A’s property finding cases saw the sale of a client’s home sell for £15,000.00 above the asking price after a private bidding war – something that was ordinarily seen reasonably often throughout the post pandemic period in mid-2020 through to mid-2022.

There are various “market hotspots” which have seen a strong resilience in some areas of the UK where house prices have still increased. Amazingly, my home town of Huddersfield even saw an increase in average house prices, which has – as ever – a lot to do on which side of the town the property is located. High demand areas such as Holmfirth and Slaithwaite (pronounced “Slawit” for the uninformed!) still see strong sales where demand outstrips supply.

In contrast, some regions of the UK saw as much as a 15% decrease in property value.

Market Activity

In the face of falling house prices, demand for homes saw an increase in recent months, aided in some cases by government initiatives to support first time house buyers to enter into the market.

In addition, the UK inflation drop applied further downward pressure on borrowing costs, hinting at a potential interest rate cut by the Bank of England. These factors, combined with falling mortgage rates have drummed up life into the housing market, providing potential buyers with greater confidence to sell or buy.

Looking Ahead into 2024

Depending on which sources you consider from either Nationwide or Halifax, it is presently predicted for house prices to remain flat or fall between 2% and 4% from their current position. Both of the UK’s big mortgage players express caution, foreseeing a cooling-off in the housing market, albeit much less severe than initially predicted.

On the whole, 2024 sees much of the same as 2023 but with less uncertainty than at the time we headed in to a New Year, this time last year.

Article Sources:

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/march2023 https://www.bankofengland.co.uk/boeapps/database/Bank-Rate.asp
https://www.forbes.com/uk/advisor/personal-finance/2023/12/29/house-prices-updates/