The latest official data from the Land Registry shows an annual fall of just 0.1%, with the average UK house price standing at £291,000 in September. This isn't far off the all-time high recorded in November 2022, which was £293,000.
Here, Which? analyses what's happening to house prices according to other indices including Nationwide, Halifax, and Rightmove, and explains what might come next.
How have house prices changed?
House prices have risen considerably in the last couple of years, with the pandemic and previous stamp duty holiday bringing about a more volatile market.
The Land Registry's UK House Price Index is the most reliable barometer of what's happening to house prices, as it's based on actual property sales rather than asking prices. It works on a two-month lag, so the most recent figures are for September.
UK dipped by only 0.1% between September 2022 and 2023.In the 12 months prior, house price growth soared by about 14% - so there has been a marked slowdown in growth over the past year.
There is a gap of £98,000 between the average price paid by first-time buyers and those who are already on the housing ladder in England:
First-time buyerHome moverAverage house prices over time
Find out more:How do other house price indices compare?
As well as Land Registry data, there are several other property price indices that can indicate what's going on with house prices.
The portal Rightmove provides the most up-to-date figures, but they're based on asking prices set by sellers rather than confirmed sales. Nationwide and Halifax also publish their own monthly data, based on mortgage lending.
All three indices are currently reporting annual price drops - albeit by varying amounts - as shown in the table.
Nationwide's latest data reveals house prices dropped 3.3% in the year to October. The building society's chief economist says 'housing market activity has remained extremely weak' - but prices have not plummeted.
Halifax said prices are proving to be more resilient than many expected, thanks to a low supply of homes for sale rather than buyer demand, and remain around £40,000 higher than in March 2020.
Find out more:House price changes by region in September 2023
Price changes vary from region to region and country to country.
Land Registry data shows the majority recorded monthly price decreases for September, with Yorkshire & Humber (-2.4%) and the North East (-2%) experiencing the biggest rises.
The annual picture is also split, with England as a whole recording almost stagnant growth over the 12 months from September 2022 to 2023.
As shown in the table, the average price of a home in the North East is almost half the average in England.
How many homes are being sold?
The number of purchases each month has since calmed, and there has been a marked drop-off in 2023. The most recent data from HMRC shows that an estimated 92,600 transactions went through in September - a hefty drop of 19% compared to September 2022, and 2% lower than August 2023.
The graph below shows how numbers have fluctuated over the past three years.
Find out more:Has the property market been slowing down?
Demand from buyers has fallen over the past 12 months, which has caused the housing market to cool off. There have, however, been encouraging signs in recent months.
Estate agent trade body Propertymark reports that interest from prospective buyers - and sellers - is on the up.
The market, though, remains quieter than in previous years, and buyers hold the upper hand when negotiating a purchase price.
Zoopla says sellers are accepting discounts of £18,000 on average in order to agree a deal.
The biggest price cuts are coming in southern England. The average discount-to-asking price for sales is 6.1% in London and the South East – equating to £25,000 being shaved off the asking price.
Richard Donnell, executive director at Zoopla, said: 'These are the best conditions for home buyers for some years, with more homes to choose from and with sellers more prepared to negotiate on price to agree a sale.'
Rightmove says sellers are taking an average of 62 days to secure a buyer. That's a significant increase from the 40 days recorded back in October last year.
Find out more:How long does it take to sell a property?
What will happen to house prices?
Experts predict house prices will fall, but there are varying forecasts when it comes to the extent of this fall. The estate agency Knight Frank forecasts that prices will drop by 5% in 2023, and the same amount in 2024. Analysts at Capital Economics predict house prices will fall by a total of 12% by mid-2024.
The Office for Budget Responsibility (OBR) predicts property prices will hit a low between December 2024 and early 2025, before climbing back up again.
It expects the average UK price to drop to £266,000 next year - a 7.6% fall from the peak we saw in late 2022.
Prices will then grow again and overtake the previous peak of £293,000 in 2027. By the end of the forecast, in 2029, prices are expected to be 6.4pc higher than they were in 2022.
Find out more:Is it possible to get a good mortgage deal?
The average rate for a five-year fix has slipped below 6%, so deals are getting cheaper. However, they aren't expected to drop significantly as experts believe they will soon begin to plateau.
This story is regularly updated with the latest house price index figures and expert views. The last update was on 27 November 2023.
source https://www.which.co.uk/news/article/whats-happening-to-house-prices-aVCwI8I22pBe