January 27, 2023

According to the Halifax House Price Index, house prices in the UK fell at the fastest rate since the 2008 financial crash.

Prices fell 2.3% from October to November this year, the largest monthly drop since October 2008, the largest in the UK mortgage moneylender said.

A typical UK property is now nearly £7,000 cheaper than the average cost of a house dropped from £292,406 to £285,579.

As a result of this monthly decline, annual house price growth slowed from 8.2% in October to 4.7% in November.

The ongoing economic impact of September mini-budget continued to influence purchasing behaviour.

“Some potential moves have been paused as homebuyers feel increased pressure on affordability and industry data continues to suggest that many buyers and sellers are taking stock as the market continues to stabilize,” said Kim Kinnaird, director of Halifax Mortgages.

Market unrest next Kwasi KwartengWith the announcement of billions of pounds in debt-financed tax cuts and huge spending, interest rates rose, making the cost of mortgages more expensive.

While a slowdown was expected “given the well-known economic headwinds and after such extensive home price inflation in recent years,” this latest announcement reflects the “worst market volatility in recent months,” said Halifax CEO Russell Galley.

The rise in property costs should also be taken into account when considering the recent fall in prices, Ms Kinnaird said. In recent years, “we’ve witnessed some of the biggest house price increases the market has ever seen,” she said.

The market may be normalising, she added, as prices are £46,403 more expensive than pre-pandemic time of March 2020 and £12,000 higher than last year.

“The market may now be in a normalization process. While some key factors, such as the limited supply of properties for sale, will remain, the development of mortgage interest rates, the robustness of household finances in the face of rising cost of living, and how the economy – and more specifically the labor market – is performing will determine house price changes in 2023.”

The only region where growth did not slow down in November was the North East of England. There the annual growth increased slightly to 10.5%, against 10.4%. It is also now the only area of ​​the UK with double-digit annual house price inflation, with an average property price of £173,587.

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