The latest UK House Price Index published by the Office for National Statistics (ONS) reveals that average UK house prices had decreased by 1.4% in the 12 months to December 2023, up from a fall of 2.3% in the 12 months to November 2023.

According to the data, the average UK house price was £285,000 in December 2023, down around £4,000 when compared with 12 months earlier.

Industry reactions: 

Iain McKenzie, CEO of The Guild of Property Professionals, commented: “The results are in for 2023 and the year finished with the average property worth £4,000 less than it did in the previous.

“This is a clear but modest readjustment in prices that will provide some relief to buyers, but also won’t concern sellers that their home’s value has changed significantly.

“All signs currently point to a recovery in house prices this year, with inflation and interest rate rises levelling off and stability returning once again to the market.

“Properties in Scotland have seen the biggest increase in prices, while London saw the sharpest fall. The UK capital has seen inflated house prices over the past decade, so the fall won’t be met with much surprise.

“The property industry has proven to be dynamic despite the challenges of the last year. Estate agents have been using this time to encourage more sellers onto the market and work with their clients to get the best price in their area.”

Nathan Emerson, CEO of Propertymark, said: “When the housing market has been through a disruptive period like it has over the last three years, it normally leads to a drop in house prices as people cannot afford homes in the same way they can during a period of economic growth.

“This drop will ease the pressure placed on people’s affordability and help them move home or step onto the property ladder.”

Verona Frankish, CEO of Yopa, commented: “Where sold prices are concerned, both the annual and monthly rate of house price growth has been in decline since last summer but we’re now seeing signs of a stabilising market with the first positive monthly rate of growth.

“What’s more, there’s growing confidence that there’s more positivity to come on the horizon.

“We’ve seen mortgage approved house prices from the likes of Nationwide and Halifax climb consistently in recent months demonstrating that buyer demand is on the up and it’s only a matter of time before this uplift in mortgage market activity starts to cultivate further positive growth with respect to sold price values.”

Nicky Stevenson, managing director at Fine & Country, said: “House prices finished the year down compared to 2022, as the gap between what sellers would accept and buyers would pay for a home narrowed.

“However, the small uptick in prices in December lends credibility to the suggestion that the property market is in a much healthier position overall than it was at the start of last year.

“Pauses in the base rate have increased consumer confidence, and expectations are that rates could fall at some point this year, which will widen affordability and encourage more demand. Today’s news that inflation held at 4% will boost hopes that interest rates will be cut sooner than anticipated.

“The Bank of England has also reported three consecutive monthly increases in mortgage approvals as momentum builds in the housing market.

“This pent-up demand from buyers who paused or held off on their property search means there is growing activity on the market. However, pricing attractively still remains key for sellers who want to grab attention and secure viewings and offers.”

Nick Leeming, chairman of Jackson-Stops, said: “The combination of falling inflation and a resilient jobs market is an encouraging sign after what many viewed as a subdued year of activity. The figures published today cover the end of 2023, and while a further dip in house prices is unwelcome, it is unsurprising for the time of year when we look at the wider trend over the final quarter.

“Across the Jackson-Stops network, Q4 saw an average of eight buyers for each available property, which demonstrates the supply challenges that are still underpinning market forces for those committed to moving. While the extremes of the pandemic property period have been firmly left behind, the reality of a more balanced picture has positioned the market well for a steadier start to 2024. In January across our network, we have started to see a modest buzz from buyers reigniting their searches, buoyed by greater clarity on mortgage rates and easing affordability.

“On a regional and local market level, the picture varies with differing stock levels and demand dictating buyers and seller activity. Though, for sellers looking to clinch a sale there are certain must-haves that will always remain in high demand creating hot pockets throughout the country, including proximity to outstanding schools, reliable transport links, and easy access to local amenities. For this reason, the home counties, namely Surrey and Kent, remain popular locations for buyers, but are also places where people are reluctant to leave once they’ve found their perfect property making demand even greater.

“The market will eagerly wait to see how the year plays out, while a good start to the new year is positive, it is too soon to determine whether if the year will strike the same note throughout. The reality of a changeable economic picture, a possible change of Government, and subsequent changes in housing policy, makes the role of estate agents even more important to help buyers and sellers navigate a continually shifting landscape.”

Marc von Grundherr, director of Benham and Reeves, commented: “The decline in house prices seen during the latter stages of 2023 has been marginal in the grand scheme of things and they remain there or thereabouts when compared to the record peaks seen during the pandemic market boom.

“Of course, the London market has naturally been hit the hardest given the far higher cost of homeownership and the greater borrowing requirements will also mean that it trails the rest of the nation when it comes to a rebound in positive property price growth.

“However, when it does turn, it turns quickly and it’s only a matter of time before the sleeping giant of the UK property market awakens.”

Jonathan Hopper, CEO of Garrington Property Finders, said: “The reset is quickly moving towards a recovery. Across the UK, house prices edged up 0.3% in December, bouncing back from November’s 0.7% fall.

“Huge regional differences mean the national figures remain tepid, but the heat is firmly back on in Scotland. Prices north of the border jumped by 3.3% (£6,600) in 2023, triple the annual rate recorded in the 12 months to November.

“Meanwhile the average home in England got 2.1% (£7,000) cheaper in 2023, and this sense of improving value has powered a surge in buyer activity since the start of 2024.

“Crucially we’re starting to see more stock come onto the market as people who delayed their moving plans last year decide that now is the time to act before prices pick up speed again.

“The recovery remains tentative, but it’s being driven by two strong factors. The first is the growing sense that 2023’s price reset is over, and that last year’s widespread price falls in England and Wales have made many areas better value.

“The second is that as the cost of borrowing edges down, homes are becoming more affordable. With consumer inflation stuck at double the Bank of England’s target, interest rates may come down more slowly than many had hoped, but last year’s trickle of buyers has already turned into a stream.”

Ruth Beeton, co-founder of Home Sale Pack, commented: “Property values remain close to historic highs and while they may have seen a marginal annual reduction during the final months of last year, the market has weathered the wider storm of economic instability, higher interest rates and a reduction in buyer activity.

“Of course, this period of prolonged market instability has left its mark and the challenge facing many sellers isn’t the price they can achieve for their home, but the time it’s taking to reach completion.

“The best advice is to remain on the front foot with every aspect of your transaction and opt for the buyer in the strongest position to proceed to give you the very best chance of a swift sale.”

Colby Short, co-founder and CEO of GetAgent.co.uk, said: “While a retrospective look at sold prices may make for worrying viewing given the consistent annual reductions seen towards the end of last year, the nation’s sellers can rest assured that these prices were agreed many months ago and the market has already turned a corner in 2024.

“Another hold on interest rates has helped to bring further stability and buyers have been returning to take advantage of lower mortgage rates.

“This demand should only build with the base rate expected to be cut this year and, as it does, sold prices will start to climb further.”