15 February 2023
If you are covering the UK house price index for December, please see the following comment from Charlotte Nixon, mortgage expert at Quilter:
“This morning’s UK house price index shows house prices dipped by a rather muted 0.4% in December 2022 in comparison to the month prior. While prices have slowed somewhat over the last few months, the annual price rise remains at 9.8% and the average UK property now costs £294,329.
“A further drop in house prices comes as little surprise, though it is likely some would have expected a larger fall by this stage. The ongoing cost-of-living crisis continues to put a real strain on millions, and increased energy bills – which have not been helped by the cold snaps seen in recent weeks – will likely worsen as the winter draws on. This pressure on our everyday finances could put a temporary halt to people’s plans to move, particularly given the added expense that comes with it.
“While the latest inflation figures show it is finally starting to head in the right direction with a slight dip month on month, this will not immediately lighten people’s financial load. When coupled with people needing to sell up their homes to avoid financial hardship leading to increased supply, the high cost of living could see demand dwindle and house prices could fall further as a result.
“However, the Bank of England’s latest interest rate hike to 4% has done little to mortgage rates, and some fixed rates are even beginning to come in under the base rate as lenders compete for new business and to retain their existing clients. While the lowest level fixed rates are only available to those with sizeable deposits or high levels of equity, as we move further into 2023, declining mortgage rates and lower house prices could well start to entice people who previously put their plans on hold to reconsider their options. If this is the case, house prices may not fall as much as originally feared.”
