Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
The UK housing market remained buoyant in the first half of 2022 before flattening off mid-year and eventually falling by year-end, Halifax said on Friday.
The mortgage lender said this downward trend will continue into 2023, with house prices expected to fall next year by around 8%, though it cautioned that forecast uncertainty remains high.
The average UK house price was £285,579 as of the end of November. This compares to £272,778 at the same time a year ago, representing a rise of 4.7%.
Properties sold to first-time buyers recorded a lower rate of annual house price inflation, at 3.6% growth, than those sold to home-movers, who saw prices rise by 5.3% over the last year.
This past year also saw a new record high in average property price, which was set in August at £293,992.
The North East of England saw the highest rate of annual property price inflation of any UK region. In the year to the end of November 2022 at 10.5% growth.
London recorded the slowest rate of annual house price growth at 5.2% over the last year, but the area still has by far the most expensive average UK property price at at £549,160.
Halifax Homes Director Andrew Asaam said it was a ‘tale of two halves’ for the UK housing market in 2022.
‘The year kicked off with average house prices continuing to rise at pace, still supported by low interest rates and strong demand from buyers. This meant the typical property had added more than £17,500 to its value by June.
‘Following such rapid house price growth, and the growing economic headwinds, a slowdown was almost inevitable. We saw this play out with a flattening of house prices over the summer, before the 2.3% decrease recorded in November.’
Halifax’s Asaam added that there is now more caution among both buyers and sellers. House demand has softened as the increasing cost of living hurts household finances and rising interest rates increase monthly mortgage payments.
‘We therefore expect that UK house prices will decrease by around 8% next year. To put this into perspective, such a fall would place the average property price back at roughly the level it was in April 2021, reversing only some of the gains made during the pandemic,’ he said.
By Heather Rydings, Alliance News senior economics reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2022 Alliance News Ltd. All Rights Reserved.