Market analysis of government data from eXp UK, the platform for personal estate agents, has shown that, after adjusting for inflation, just three areas of the UK property market have seen house prices increase since interest rates started to rise in December 2021, with the average UK house price down -9.4% in this time.
However, while house prices have been affected pretty much across the board by difficult market conditions, more affordable regions like Scotland have been less impacted compared to pricier regions like London.
eXp UK analysed the latest data from the Gov UK House Price Index (May 2023 – latest available), adjusting historic data in line with inflation, to see just how the market is actually performing since the Bank of England started to increase interest rates back in December 2021.
In Scotland (-7.6%) prices have held steady the most, followed by the East Midlands (-7.9%), and the North East (-8.0%).
These three regions are all relatively affordable, as Scotlandโs prices stand at ยฃ193,000, East Midlandsโ at ยฃ247,000, and the North Eastโs at ยฃ158,779.
The region thatโs seen the biggest drop is London (-12.3%), with house prices that average at around ยฃ526,000, followed by the East of England (-11.3%), at ยฃ346,000.
Debunking the trend
Some areas have actually seen house price gains, to buck the overall trend.
When analysing the property market at local authority level, the research by eXp UK shows that house prices in the City of London rose by 4.7% over the period to reach ยฃ988,000, while there was also a price increase of 3.2% in West Lancashire to ยฃ239,000, as well as an uplift of 2.1% in Melton to ยฃ313,000.
Other regions like Londonโs Tower Hamlets, Monmouthshire in Wales and St Helens, Merseyside, saw only minor price falls of -1.1%, -1.4% and -1.8% respectively.
Worst hit areas
The capital is the most and least affected depending on where you look and despite the relative positivity found in the City of London and Tower Hamlets, London local authorities account for six in 10 of the worst affected areas across the UK.
The City of Westminster has seen a dramatic house price fall of -25.5%, worse than any other local authority, as house prices started from a high base of ยฃ1.24 million before falling back to ยฃ921,000.
Similarly, the prime area of Kensington and Chelsea saw price falls of -20.9%, from ยฃ1.66 million to ยฃ1.31 million, while Islington experienced a reduction of -18.7%, from ยฃ849,000 to ยฃ690,000.
Three areas in Scotland have also been badly affected, with the City of Aberdeen seeing an -18.4% fall, Angus a -16.8% reduction, and North Ayrshire a -15.9% fall.
As a result, prices in North Ayrshire average at just ยฃ124,000, while they stand at ยฃ163,000 in Angus and around ยฃ140,000 in Aberdeen, proving that cheaper areas arenโt always shielded from house price decline.
Head of eXp UK, Adam Day said, โItโs been a difficult period for investors and homeowners, as rapid interest rate rises have stifled a market which previously experienced unprecedented house price growth.
โBut the research highlights that itโs not the same everywhere, as more expensive areas generally seem to have suffered more.
โScotland has been the least affected region on average, with areas like East Lothian barely seeing any decline at all.
โLondon is the most affected area, while looking closer certain prime areas like Westminster have been hit extremely hard.
โSupply and demand is key, so if youโre a buyer you should check out the availability of properties in your region to ascertain whether thereโs value to be had. If thereโs ample supply there may be an opportunity to haggle on price.โ
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