London leads the way as UK house prices drop again
House prices fell by 1.2 per cent in October, widening from the 0.6 per cent fall recorded in the prior month, according to the latest reading from the ONS.
Buyers who purchased a home in October paid £3,000 less compared to customers in the exact same period last year.
During the month the North East was the only English region which saw an increase in average house prices in the 12 months to October, growing 0.2 per cent.
Meanwhile, London saw the largest fall with prices sinking 3.6 per cent, meaning around £16,000 was slashed from the average property in the capital.
The average cost of a home still remains around £40k above pre-pandemic levels and buyers continue to struggle with affordability due to a squeeze on public finances.
However, news today that inflation has fallen below analysts expectations to 3.9 per cent, may lead mortgage lenders to further cut the prices of their deals.
Anna Clare Harper, chief executive of sustainable investment adviser GreenResi, said: “This fall in average prices in the year to October was led by London, where prices fell by -3.6 per cent, partly because they started from a less affordable level for local people.
“While house prices arouse great emotions, they are ultimately a simple, scientific reflection of supply and demand. A 1.2 per cent nominal house price fall (which of course reflects a much higher real fall) reflects the calming impact on demand of higher interest rates.”
She added: “The result for investors not reliant on bank finance is that there are plenty of opportunities to buy at attractive prices as competition is much reduced.”
While house prices have fallen over the past few months, the UK’s rental market is continuing to experience staggering price hikes.
The ONS letting market index updated today showed that private rental prices paid by tenants in the UK rose by 6.1 per cent in the 12 months to October 2023, up from 5.7 per cent the month before.
Gareth Atkins, managing director of Lettings at Foxtons, said:“If the trends we saw this year continue, especially those from the latter half of 2023, I expect we will see much more consistent pricing with a gradual increase and decrease on either side of Q3 and more stability in available stock.
“A predictable market will be a welcome respite for landlords and renters. However, 2024 may also see some changes in the sector with Rental Reforms, so at Foxtons we invest substantial time and resources in state-of-the-art analytics and robust expert insight to ensure our clients are prepared, whatever the new year brings.”