Annual house prices fall for first time in more than a decade

This was down from the 0.8% worth of growth seen in the 12 months to August – and represents the first annual fall in the UK’s average house price since April 2012. Overall, UK house price annual inflation has been slowing since July 2022 – when annual inflation was at 13.8%.  

Meanwhile, the provisional estimate for the average UK house price was £291,000 in September 2023 – which was little changed from 12 months ago, but above the recent low in March 2023. On a seasonally adjusted basis, the average UK house price decreased by 0.5% following a month-on-month increase of 0.7% in August 2023.  

Broken down by country, both England and Wales saw annual house prices drop in September – decreasing by 0.5% and 2.7% respectively.  

In England, this is down from the revised increase of 0.6% in the 12 months to August 2023, and represents the first annual fall since January 2012, with the average house price now sitting at £310,000. In Wales, the 2.7% decrease is down from the zero percent growth seen in the 12 months to August, with the average house price now standing at £215,000.  

Scotland, however, saw an increase in average house prices in the 12 months to September – going up by 2.5% respectively. This is up from the 1.9% increase seen in the year to August, with average prices being at £195,000 – substantially higher than the recent low in February 2023. 

Meanwhile, the average house price in Northern Ireland increased by 2.1% over the year to the third quarter of 2023 – with the country remaining the cheapest country to purchase a property, with an average house price of £180,000.  

Responding to the latest figures, Atom Bank’s head of mortgages Richard Harrison said the ONS’ data reflects the “anecdotal evidence” they’ve received from brokers.  

They added: “The last year has obviously been very challenging for the property market but, with the Bank of England now holding base rate for two consecutive months, this morning’s inflation news and the continued improvement in mortgage deals on offer, we should see buyer confidence slowly improve.  

“Rightmove recently said that vendors are now pricing more realistically and, while sales agreed are still lower than more normal pre-pandemic levels, the gap is closing. Sentiment is everything in the property market, so slightly lower mortgage rates and house prices combined with stronger pay increases will improve affordability for customers, allowing for a more positive view of the market for the year ahead.

“While some uncertainty still remains, the most important thing for brokers and homebuyers is to work with a lender that can offer certainty and, with this, comes greater confidence.”