UK House Price Index: House prices remain static in December as inflation continues to drop

According to today’s UK House Price Index from the Office for National Statistics, average UK house prices are now £285,000 in December 2023, £4,000 lower than December 2022 and similar to November 2023.

Stacy Eden, national head of real estate and partner at leading audit, tax and consulting firm RSM UK, comments: ‘Property prices are bottoming out given the easing of the cost-of-living crisis, with falling inflation, the expected drop in interest rates and lack of housing all impacting prices. We expect to see house prices to continue to hold steady, underpinned by the chronic lack of supply with the peak to trough fall being less than initially expected.

‘There have been worrying trends with former owner-occupied properties and existing resold properties continuing to fall in the month whilst newer and first time buyer properties saw price increases. This is particularly true of London where existing properties have taken a real hit over the last year, showing a 5% fall against a 1.4% overall annual house price decrease. Overall housing transactions remain approximately 25% lower than last year based on October 2023 figures, whilst in London they have almost halved highlighting the lack of liquidity in the market. 

He added: ‘As the government looks for supply side reforms to kickstart the UK economy, then resolving the supply and demand equation (through planning reforms) seems to be an obvious place to start. It is quite clear the opposition realise the shortage of housing is causing too many people to rely on the state to provide their housing needs as rental growth causes rent to take too high a proportion of income. However, the government seems to be unable to deal with the chronic lack of housing – highlighted by scrapping local targets. We hope the upcoming budget makes a serious attempt to resolve this issue as well as reducing SDLT to enhance cash flow and investment in the market.’