UK House Prices Steepest Fall In More Than A Decade
Average UK house prices declined by 1.2 per cent in the 12 months to October 2023, down from a revised fall of 0.6 per cent in September, the Office for National Statistics. It was the largest drop since October 2011 and left the average house price at £288,000, some £3,000 lower than 12 months ago. London was the UK region with the biggest contraction of 3.6 per cent, the largest fall since August 2009. But the capital remained the most expensive part of the country, with the average home costing just over £515,500. Official data is the most comprehensive measure of UK house prices because it includes cash purchases, unlike other indices. But since they are based on deals finalised in October, which might have been agreed several months earlier, the figures are less timely than those of Halifax and Nationwide. Their indices are based on mortgages agreed in the latest month, and both lenders reported an easing in the annual decline in house prices in November. The fall in prices in October reflects the impact of high mortgage rates on the property market, after the Bank of England raised the cost of borrowing from a record low of 0.1 per cent in November 2021 to a 15-year high of 5.25 per cent. But with inflation falling more than expected to 3.9 per cent last month, markets expect the central bank’s Monetary Policy Committee to begin cutting interest rates early next year. Data also showed UK rental prices rose by an annual rate of 6.2 per cent in November, up from 6.1 per cent in October and the highest annual increase since the ONS began collecting figures in January 2016. Rental demand has risen because of households not being able to afford mortgage payments. Rental prices are also boosted by landlords passing on higher borrowing costs and a shortage of properties available to rent.
UK house prices fell at the fastest pace in more than a decade in the year to October, with the biggest drops in London, according to official data that points to the impact of high interest rates on the property market.
Tags : UK house prices Rental demand Bank of England property market high mortgage rates