Is Now the Right Time to Buy a House in the UK
Now that we have entered 2024 the uncertainty in the property market is still apparent. At the end of last year we saw a couple of months of significant falls in The UK national house price and it will be interesting to see is this trend continues. On a positive note, mortgage rates have fallen around 1.5% from their peak last year with many mortgage rates now below 4% and that will make buying a house more accessible for many, in theory this should get the property market moving faster and add a boost the stagnant property market that we are currently experiencing.
Certain costs for homeowners may still hold the market back, inflation at the shops and higher energy bills have caused a cost of living crisis. At the end of last year it was reported that mortgage arrears are up 18% when compared to the third quarter, this has still not caused people to be forced to sell their home. It seems that a lack of supply of properties advertised for sale is what has kept house prices relatively stable. By the end of last year it was reported at The Land Registry that house prices in The UK had a yearly fall of 1.2%, this certainly wasn’t as severe as many experts had predicted but it needs to be appreciated that this figure is propped up by a far better six months at the beginning of the year when compared to the second half.
What Are the Current House Price Figures?
In the UK there are various different sources that analyse the market and produce average house price figures with differing results so here’s a look at what each index has reported:
The Halifax House Price Index reported in January shows that house prices have increased by 1.3%, which shows an increase of four consecutive months. According to Halifax House prices are 2.5% higher than 12 months, which is contrary to what figures at The Land Registry report, who show a decline, and it is important to note that Halifax’s analysis is based on the values of mortgage applications. However, Halifax have predicted falls of between 2% and 4% for 2024. According to Halifax the average house price now stands at £291,029. The Halifax national house price chart can be seen below:
The Nationwide House Price index for January shows a monthly increase of 0.7% and comments how it is a positive start for 2024. House prices are almost the same as the same time last year, showing that the falls we experienced have almost retuned, now just 0.2% down. The report for January 2024 shows that the national house price is £257,656.
Similar to Rightmove, Zoopla record advertised “For Sale” prices so they are always more optimistic than Land Registry results and prices that are reported by mortgage lenders. Zoopla are reporting that house prices have fallen 1.2% since the same time last year. According to Zoopla the average house price currently stands at £264,600. The headline news for this month is that sellers are having to agree a price of around £18,000 less than the advertised price.
House Prices Have Fallen Furthest in the South
The graphic below shows the annual increase or decrease in house prices for different regions across The UK. Northern Ireland and Scotland are the only regions that have increased since last year, the south of the country has shown decreases with both The South East and East of England showing the largest falls.
Rightmove figures are always the most optimistic as they are based on what price sellers are advertising their properties for. During November Rightmove has recorded a large fall of -£6,088 and it is reported that this is the largest fall for this time of year in five years. Prices on Rightmove are based on asking prices and the UK average now stands at £362,143. It should also be taken into account that that agreed sale prices are £18,000 less than the asking price.
Office of National Statistics
The Office of National Statistics released data during November which reflected figures reported up until September 2023 as reported here. These figures are based on actual sold prices recorded at The Land Registry but unfortunately they are quite delayed and they don’t show what has happened in the last quarter. They report that the average house price in September stood at £291,000.
Should You Buy a House in 2023 or Wait?
This article from The Times shows a detailed analyses if you are considering on waiting to buy a house or buying your house now.
From looking at the sources of data that are based on actual agreed and recorded house prices from Nationwide, Halifax and The Office of National Statistics it can be seen that house prices are currently falling. It is also clear that they we can’t currently see any sign of this trend bottoming out and the slow growth statistics reported by Zoopla also show that prices may be set to fall further.
If your in a position where you don’t have to move you may wish to be patient and see if prices fall even further. There is certainly a lot of negative predictions that house prices could end up falling between 5-10% by the end of the year.
Here are some of the the predictions:
|Property Consultancy JLL
|Henry Pryor Housing Expert
House Prices May Continue to Fall But Then Rise Due Inflation
With the value of the pound decreasing due to inflation there may be a window of opportunity to buy once house prices have bottomed out and then also benefit from the value of property having to catch up with the new lower value of our pound. In the most recent report Core Inflation has fallen to 5.6% which is down from 5.9% that was measured in September, it seems that inflation is starting to fall. Nevertheless, the price of our goods and services has increased far more during 2023 than a typical year. At some point in the future there will be a recovery and you would expect a rise in house prices that will be similar to the rise that we have seen with the prices of our goods and rises in our wages.