The Office for National Statistics (ONS) said on Wednesday that the average UK house price has fallen by around £4,000 in the year to December 2023.
The ONS said that in December last year a typical house price war £285,000 meaning there was a 1.4% decline and across England and Wales property values was down annually by 2.1% and 2.5% respectively.
In Northern Ireland house prices increased annually by 1.4% and in Scotland values rose by 3.3%.
House prices in the north west of England said the highest annual increase in the 12 months to December by 1.2%, London property values plummeted by 4.8%.
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The only other English region which saw an annual house price increase was the West Midlands at 0.3%.
Aimee North, head of housing market indices at the ONS, said, “Our initial estimate of UK house prices shows another annual fall in December however the pace of decrease has slowed since the previous month.
“Our latest figures also show a return to annual price growth for two English regions: the North West and West Midlands.
“Meanwhile the annual rise in UK private rental prices remains unchanged at a record-high level for the second consecutive month.”
Richard Harrison, head of mortgages at Atom bank, said, “The final month of 2023 saw vendors becoming increasingly competitive, reducing their pricing in the hope of closing a sale before the new year.
“Likewise, higher mortgage rates and stretched affordability for some buyers may have motivated them to offer below the asking price, in a bid to offset the impact of higher borrowing costs.”
Nathan Emerson, chief executive of property professionals’ body Propertymark, said: “When the housing market has been through a disruptive period like it has over the last three years, it normally leads to a drop in house prices as people cannot afford homes in the same way they can during a period of economic growth.”
Marc von Grundherr, director of estate agent Benham and Reeves, said: “The decline in house prices seen during the latter stages of 2023 has been marginal in the grand scheme of things and they remain there or thereabouts when compared to the record peaks seen during the pandemic market boom.”
Nick Leeming, chairman of estate agent Jackson-Stops, said: “Across the Jackson-Stops network, quarter four saw an average of eight buyers for each available property, which demonstrates the supply challenges that are still underpinning market forces for those committed to moving.
“While the extremes of the pandemic property period have been firmly left behind, the reality of a more balanced picture has positioned the market well for a steadier start to 2024.
“In January across our network, we have started to see a modest buzz from buyers reigniting their searches, buoyed by greater clarity on mortgage rates and easing affordability.”
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