House Price Watch Oct 2023
House price growth slowed from 8.3% to -2.2% over the past year and transactions are likely to be 12% lower than 2019, the last 'normal' housing market benchmark. While house prices nudged up this month, activity and house prices are expected to remain subdued into 2024. Affordability remains stretched but the first-time buyer market has held up relatively well. Buying a first home remains attractive for many, especially against the backdrop of rental prices increasing.
What’s happening nationally
House prices on average are up +0.5% over the past month and down -2.2% in the past year.
Halifax, Nationwide and Rightmove reporting October figures noted a rise in house prices over the past month, while Land Registry, reporting September figures, noted a slight dip in house prices. All of the indices report a fall in annual house price growth.
Indices based on:
Land Registry – registered property transactions in September.
Nationwide & Halifax – mortgage valuations in October.
Rightmove – asking prices posted on Rightmove in October.
*Rightmove is not included in the index average as the basis for its index is different (asking price vs agreed sale price)
| Index reports: | Monthly change | Annual change |
|---|---|---|
| Land registry | -0.5% | -0.1% |
| Nationwide | +0.9% | -3.3% |
| Halifax | +1.1% | -3.2% |
| Rightmove | +0.5% | -0.8% |
| Average change | +0.5% | -2.2% |
House prices in your area
Land Registry reported a fall in house prices in most areas over the past month with the biggest declines in Yorkshire & Humber (-2.4%) and the North East (-2.0%). The annual rate of house price growth continues to slow in all areas and is in negative terriorty in Wales (-2.7%), the South West (-1.6%), South East (-1.4%), the East of England (-1.4%) and London (-1.1%).
Average house prices remain highest in London (£537K) and lowest in the North East (£163K).
House price growth is higher for properties that are detached (+1.1%) and lower for properties that are semi-detached (-0.1%) terraced (-1.3%) or flats/ maisonettes (0.1%) according to September Land Registry data.
| UK Region | Average price £ | Monthly change | Annual change |
|---|---|---|---|
| England | |||
| Nothern Ireland | |||
| Scotland | |||
| Wales | |||
| North West | |||
| Yorkshire and The Humber | |||
| North East | |||
| West Midlands | |||
| East Midlands | |||
| South West | |||
| East of England | |||
| South East | |||
| London |
| UK City | Average price | Annual change |
|---|---|---|
Market Monitor
There were 86K transactions in September, down -0.6% on August, 17% lower than September 2022. 86K transactions is in the lowest range we have seen in the last decade.
Demand continues to fall as do new instructions from sellers this month. Average stock per agent is up month on month.
Despite weakness in overall buyer demand, the first-time buyer market has held up relatively well. Zoopla says: “Buying a first home remains attractive for many, especially against the backdrop of rental prices increasing. Firsttime buyers (FTB) look set to be the largest buyer group in 2023, closely followed by cash buyers. FTB’s share of sales is down on recent years but still holding up as the rapid growth in rents continues to support demand. In markets with cheaper house prices, FTBs’ mortgage repayments are lower than rental costs.”
Time to sell has increased to 62 days up from 59 days last month and above the 12 month average of 56 days.
How busy is the market?
- Not busy
- Normal
- Very busy
- Transactions down slightly in September, still at a ten year low
- Total transactions in September 86K
- -0.6% from last month
- -17% from September last year
Homes for sale vs homebuyers
- Good availability of homes
- Normal
- Shortage of homes
- Buyer enquiries continue to fall(-28% RICS); 18 months of falling demand
- Seller enquiries down (-7% RICS); sales instructions continue to fall
- Average stock per agent 54; up from 53 last month (incl under offer/ Sold STC Rightmove)
Average speed of sale
- Fast
- Normal
- Slow
- 62 days to find a buyer, up from 59 days last month (12 month average 56 days Rightmove)
What the experts say
Rightmove - agent's view
““New seller asking prices rise by 0.5% (+£1,950) this month to £368,231. Although newly advertised property prices typically rise at this time of year, this is the smallest increase in our October report since 2008, and significantly below the average increase of 1.4% seen at this time over the last 20 years. However, despite this more muted rise in average asking prices, buyer activity levels remain significantly lower than during the post-pandemic market frenzy. The number of sales being agreed is now 17% below this time last year, with the proportion of homes finding a buyer and being marked Sold Subject To Contract dropping from an average of eight in ten at the height of the frenzy, to six in ten now.”
Nationwide
“October saw a 0.9% rise in UK house prices, after taking account of seasonal effects. This resulted in an improvement in the annual rate of house price growth to -3.3%, from -5.3% in September. Nevertheless, housing market activity has remained extremely weak, with just 43,300 mortgages approved for house purchase in September, around 30% below the monthly average prevailing in 2019. This is not surprising as affordability remains stretched. The uptick in house prices in October most likely reflects the fact that the supply of properties is constrained. There is little sign of forced selling, which would exert downward pressure on prices, as labour market conditions are solid and mortgage arrears are at historically low levels. Activity and house prices are likely to remain subdued in the coming quarters. Despite signs that cost-of-living pressures are easing, with the rate of inflation now running below the rate of average earnings growth, consumer confidence remains weak.”
Halifax
“UK house prices rose in October, up +1.1% on a monthly basis, breaking a run of six consecutive monthly falls. The average house price is now £281,974 – an increase of almost £3,000 compared to the previous month. On an annual basis, prices are down -3.2%, though the decline was at a slower pace than we saw in September (- 4.5%). Average house price £281,974 Monthly change +1.1% Quarterly change -1.9% Annual change -3.2% “Prospective sellers appear to be taking a cautious attitude, leading to a low supply of homes for sale. This is likely to have strengthened prices in the short-term, rather than prices being driven by buyer demand, which remains weak overall. While many people will have seen their income grow through wage rises, higher interest rates and wider affordability pressures continue to be challenges for buyers. Despite weakness in overall buyer demand, the first-time buyer market has held up relatively well. Buying a first home remains attractive for many, especially against the backdrop of rental prices increasing.”
Zoopla (Hometrack)
“House price inflation has slowed from 9.6% to -1.1% over the last year with 4 in 5 housing markets registering small annual price falls. Regulation of mortgage lending has built market resilience to higher mortgage rates although household buying power remains lower. Transactions have been hit hardest and will be 23% lower than 2022. First-time buyers and cash buyers account for 2 in 3 sales in 2023. Low price falls and 5% mortgage rates mean housing is still expensive. We expect UK house prices to fall 2% over 2024 as rising incomes steadily repair housing affordability. 2024 is set for another year of 1m sales. This could be higher if mortgage rates fall back towards 4% sooner than expected in 2024.”
RICS
“The October 2023 RICS UK Residential Survey results once again point to a subdued picture for home buyer activity as the market continues to adjust to the tighter lending climate. That said, although many aspects of the latest feedback remain downbeat, the current readings across most indicators are at least somewhat less negative than those returned in the previous iteration of the survey.”
