From November 2022 to November 2023, there has been an overall downward trend in UK house prices, particularly in the recent months.
Data from Rightmove indicates that the average asking price for properties in November decreased by 1.7% (-£6,088) compared to the previous month, marking the highest monthly drop since 2018. This change is primarily attributed to the approaching Christmas season, prompting sellers to adopt more realistic pricing strategies to attract buyers.
Rightmove predicts that as the year comes to an end, asking prices from new sellers will continue to decline. Some serious sellers are distinguishing themselves from more casual sellers by offering attractive prices to ensure buyer interest.
However, the decline in November is more significant than usual for this seasonal pricing period, suggesting that an increasing number of new sellers are heeding the advice of property agents and entering the market with more appealing prices to stand out in the competition.
Nevertheless, it's crucial to note that there are significant regional variations in the UK real estate market. Looking at regional levels, the northwest and northeast regions of England showed positive growth rates of +2.5% and +1.3%, respectively.
However, on a national scale, there is a downward trend in house prices, especially in the London area, where prices have declined by 2.1%. Within the London area, there are substantial differences in the performance of house prices in different regions, with some areas experiencing increases while others face declines.
The Merton area saw the most significant decrease in house prices, dropping by -8.9%. Upon analysis, the Richmond Upon Thames area has been the region with the highest annual growth rate for three consecutive months (September, October, and November).
Moreover, changes in the UK real estate market are closely linked to macroeconomic conditions and policy regulations. At the end of 2022, economic downturn and uncontrollable inflation issues led to consecutive declines in house prices.
The central bank responded to inflation pressures with 14 consecutive interest rate hikes, causing significant volatility in the UK real estate market. Although interest rate hikes have been paused this year, the rates reached an uncomfortably high level before the pause.
