In 2023, UK house prices experienced a mild decline, defying expectations of a significant downturn, as indicated by data from one of the country’s largest mortgage lenders.
Nationwide Building Society reported a 1.8% decrease in house prices compared to the previous year, with December’s average price standing at £257,443. This decline was slightly greater than the 1.3% decrease that economists had anticipated but significantly less severe than the 10% drop that had been predicted by many experts one year ago.
According to Nationwide, house prices remained stable in December.
Robert Gardner, Nationwide’s chief economist, expressed cautious optimism for 2024, although he deemed a sharp rebound in house prices unlikely.
Gardner stated, “Investors have grown more hopeful that the Bank of England has already increased interest rates sufficiently to bring inflation back to its target and may reduce rates in the years to come.”
He continued, “Nevertheless, a rapid resurgence in activity or house prices in 2024 seems improbable. Despite a reduction in cost-of-living pressures, with inflation now trailing behind the rate of average wage growth, consumer confidence remains fragile, and real estate professionals continue to report limited levels of new buyer inquiries.”
Gardner concluded, “If the economy maintains its sluggish pace and mortgage rates experience only gradual moderation, as we anticipate, house prices will likely either record a slight decline or remain relatively steady (possibly within a range of 0% to -2%) throughout 2024.”
