Confidence appears to be returning to the housing market, Zoopla suggests, after property prices fell by 0.8% annually in December 2023, but showed no month-on-month change.
As a result, the average house price in the UK stands at £264,400, which is £2,100 less than a year ago, but the same as November 2023.
Plus, the property website says there has been a 22% uplift in the number of homes listed for sale, with 13% more sales agreed than a year ago across all countries and regions.
Yorkshire and the Humber showed the most prominent rise, with sales up 19% and the West Midlands with a 17% increase.
Tom Bill, head of UK residential research at Knight Frank, said: “The housing market has picked up in January where it left off before Christmas, with buyer demand being driven by falling mortgage rates. Things have improved markedly on paper as the best rates fall below 4% and that should translate into a seasonal spring bounce.”
Where did house prices fall the most annually?
Overall, year-on-year movement on house prices falling slowed in December 2023, with the largest fall in the East of England of 2.5%.
Though some regions in the UK still saw property prices go up, with Northern Ireland seeing an annual increase of 3.2%. Here’s a list of where house prices fell the most in 2023 throughout the UK.
Swipe to scroll horizontally
City
Annual percentage fall in house prices
Aberdeen
-2.9%
Southampton
-2.7%
Portsmouth
-2.3%
Cambridge
-1.9%
Bournemouth
-1.9%
Leicester
-1.8%
Bristol
-1.5%
Oxford
-0.6%
Nottingham
-0.6%
Birmingham
-0.1%
Birmingham just made the cut with a 0.1% fall in property prices, whereas regions more up north of the UK such as Leeds, Manchester and Sheffield saw an increase in house prices of at least 0.4%.
Is now a good time to buy or sell a house?
Even though house prices have started to stabilise and we have seen mortgage rates fall, some experts warn not to take this at face value.
Sarah Coles, head of personal finance at Hargreaves Lansdown is worried “mortgages are just part of the picture.”
The high cost of living is an important factor to consider as it will impact buyer affordability. Plus, with the UK economy “teetering on the brink of recession” as Coles puts it, house prices could fall further in 2024.
“It's worth bearing in mind that property price falls aren’t just an issue for buyers and sellers, The HL Savings & Resilience Barometer shows that all homeowners will pay a price,” says Coles.
She adds for those with small deposits, “there’s the immediate risk of negative equity, which can be a nightmare for anyone forced to sell up. For those with a bigger chunk of equity in their property, the erosion of that equity still makes a remortgage harder and more expensive.”
Falling house prices will also have a knock-on effect on retirement savings, as homeowners might find themselves paying off their mortgage over a longer term.
That said, some experts believe the outlook for buyers and sellers in the short term is a positive one.
Matt Thompson, head of sales at Chestertons, says: “The increasing availability of more affordable mortgage deals thereby plays a key role and will likely continue to fuel a surge in buyer activity over the coming weeks.”
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Vaishali has a background in personal finance and a passion for helping people manage their finances. As a former staff writer for MoneyWeek, Vaishali covered the latest news, trends and insights on property, savings and ISAs.
She also has bylines for the U.S. personal finance site Kiplinger.com and Ideal Home, GoodTo, inews, The Week and the Leicester Mercury.
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