Are UK House Prices Falling in November 2023?

The Zoopla UK House Price Index for October shows that 4 in 5 local housing markets saw annual house price falls.

In addition, the property portal’s forecast at the start of the year looks accurate. Zoopla predicted the market would see one million transactions and prices would drop by 5% before 2024.

Let’s see how this affects property investment in more detail.

Highlights from the Zoopla UK House Price Index include:

• House price inflation has slowed to -1.1%. Last year, house price inflation stood at 9.6%.
• Property values have fallen in 80% of local housing markets.
• House prices are expected to fall by 2% in 2024. Rising incomes will help people afford houses.
• One million property sales are anticipated for 2024 – this could increase if mortgage rates fall below 4%.

For a full breakdown, take a look at the latest 2023 property market predictions here!

Thanks to the cost-of-living crisis, buyer demand in the property market is low. 

According to this index, it is a fifth lower than October 2023 and 25% less than the five-year average for the same month.

As such, price growth has slowed from 9.2% to -1.1%.

Other house price indices have shown more significant falls in price growth. Meanwhile, the HM Land Registry UK House Price Index recently registered a 0.2% price growth for July.

As other Zoopla indices have shown, the South of England has led the way for property value decline. However, more local housing markets around the country are registering price falls over the last 12 months.

Six months ago, only 5% of housing markets recorded a fall.

However, price falls are very low – no market has seen a drop of more than 5%.

This shows the UK housing market is still relatively stable. 

While prices may continue to fall into the new year, the average cost is expected to hit £300,000 by 2025 (according to easyMoney).

Want to know if buy-to-let is a good investment in 2023? Read our updated buy-to-let investment guide for the latest data!

Interestingly, the North West was the only English region with the lowest number of recorded price falls. 

Only 56% of North West local housing markets registered a price drop. Similarly, 58% of North East markets recorded a fall, again proving that the country’s northern regions show the greatest resilience to property fluctuations.

The North West has an average property price of £215,791, according to the Land Registry UK House Price Index. In comparison, the UK’s average price is £291,044.

The North West also has the highest capital growth prediction (11.70%) out of the country. Cities like Liverpool and Manchester garner significantly high yields.

In short, the region represents a promising opportunity for buy-to-let investors.

Zoopla suggests that prices falling further – coupled with income increases – should reset affordability.

They forecast a 2% fall over 2024, depending on mortgage rates – less severe than 2023.

Currently, the number of properties available to buy is the highest in five years. In response, sellers are pricing lower than they usually would to guarantee a sale. This will keep house price growth low.

However, the Bank of England predicts inflation to fall to 2% by 2025, which would see interest rates – and thus mortgage rates – fall faster throughout 2024. This will inject life into the market, and buyer demand should increase. Once buyer demand increases, property prices should usually rise alongside.

Looking to get started with property investment? Read our recent RWinvest insights for the latest information on the UK property market!

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