House prices fall below December average as market waves goodbye to miserable year
The price of a house fell by 1.9 per cent in December, according to the latest reading from property portal Rightmove.
On average the cost of a property in the UK is now £355k, which is around £6,000 less than what a typical home cost last month.
Rightmove said that it is not unusual for the value of a property to be cut in December due to seasonal factors, with house prices typically falling by 1.5 per cent during the last month of the year.
But the firm believes that this slightly larger fall is linked to more new sellers looking to “price below the competition” in efforts to shift a sale before the end of the year.
It comes as sellers and buyers alike will be saying goodbye to an incredibly tough year for the UK housing market.
A disastrous mini budget conducted by former prime minister Liz Truss crushed hopes for many prospective buyers at the start of the year, with the impact still being felt well into the start of 2023.
After Truss’ mini-budget last September mortgage rates shot up to 6.65 per cent.
Mortgage rates began recovering but consistent rate rises by the Bank of England, in response to rising inflation, once again sent mortgage lenders into a frenzy.
At its peak over the summer, some fixed deals rose to 6.66 per cent.
However, Rightmove said that average mortgage rates have now fallen for 19 consecutive weeks, with the average 5-year fixed mortgage rate at 5.11 per cent compared to 6.11 per cent in July.
A growing desire for family homes is also a sign that the market is on the path to recovery.
Rightmove said that demand for all three and four-bed properties -excluding four-bed detached houses – is up by nine per cent versus the post-mini-budget period of this time last year.
Tim Bannister, Rightmove’s director of property science, said: “Further price falls beyond the usual seasonal trends that we’d expect at this time of year signal that some new sellers are continuing to act on the advice of agents to price competitively.”
“We entered this year under a cloud of uncertainty, as the fallout from the Autumn mini-Budget filtered through to lower activity levels.”
He added: “High mortgage rates which have added to already-stretched buyer affordability have been a challenge throughout 2023 and this is likely to carry into next year.”
“However for now, there appears to be more calm and certainty heading into 2024, and the annual fall of 1.1 per cent in asking prices highlights the market’s much-better-than-predicted resilience this year.”