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House Price Figures Reveal Mixed Regional Picture

The latest house price figures have been published by Rightmove, indicating that the price of the average UK property is down again. But the picture is a little more complex than that.

While the headlines may speak of a ‘miserable year’ for the property market, buyers in some of the more traditionally expensive regions may find a bit of relief in the fact that prices are more likely to be cheaper there than elsewhere.

The December fall of 1.1 per cent across the country as a whole is more than normal for this month.  Director of property science Tim Bannister this is a “signal that some new sellers are continuing to act on the advice of agents to price competitively”.

However, rather than showing anything like a uniform pattern, the national trend for new sellers asking prices to be lower than a year ago only applies to seven out of 11 regions in Great Britain.

While London has seen asking prices slip back into positive territory (up 0.1 per cent year-on-year), the neighbouring south-east has seen the greatest drop over the past 12 months, down 3.7 per cent. The other regions in decline were the East of England (down 3.2 per cent) and the south west (down 0.9 per cent).

By contrast, asking prices rose by 1.5 per cent in the north west of England, with Wales and Scotland also up by over one per cent.

What that means is that those seeking mortgages in Oxfordshire or other south-eastern counties are more likely to find homes costing less than they did a year ago.

The flip side of that, of course, is that mortgage costs have risen sharply over the last year and a half, with a prime reason being a series of base rate hikes to combat inflation. A second factor was the financial turbulence caused by the September 2022 mini-budget.

However, these factors may now be on the wane. The effects of the mini-budget on the markets have settled and the fact inflation is now on a clear downward track means that, at the very least, further interest rate increases are less likely, even if it may be nearer the end of 2024 than the start when rates start to come down.

Moreover, it is important to note that while rate rises will have (or soon will) hit a lot of existing mortgage holders who had become used to very low interest rates, the situation since 2009 was an historical anomaly; the rates now are much nearer to long-term averages, which means it is less likely they will change drastically.

Overall, Rightmove observed, mortgage rates have fallen for 19 weeks in a row, a major positive sign for aspiring buyers.

Rightmove commented that the current situation indicates the market is settling down somewhat, defying expectations of a much larger drop in prices, while family buyers are increasingly returning to the market.

The competitive seller nature of the market identified by Mr Banister, as well as the focus of falling prices in certain regions, shows the market has some very interesting details beyond the basic headlines that buyers would do well to note. Rightmove has predicted that these factors will influence a further one per cent drop in prices overall across the UK in 2024.

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