Halifax’s latest House Price Index shows a price drop in November, but the lender points out that the last few years have recorded some of the biggest price increases we’ve ever seen.
House prices fell by -2.3% in November compared to -0.4% in October, according to Halifax. The lender published its House Price Index report yesterday (7 December) and said that the annual rate of growth has now dropped to +4.7% from +8.2%. A typical property in the UK now costs £285,579 compared to £292,406 last month.
‘The monthly drop of -2.3% is the largest seen since October 2008 and the third consecutive fall,’ says Kim Kinnaird, Director of Halifax Mortgages. ‘While a market slowdown was expected given the known economic headwinds – and following such extensive house price inflation over the last few years (+19% since March 2020) – this month’s fall reflects the worst of the market volatility over recent months.’
Why home buyers and sellers are holding off
Halifax says that some home moves have been put on hold while buyers and sellers take stock as the market continues to stabilise. However, the lender points out that we’ve seen substantial price growth in the past two years.
‘When thinking about the future for house prices, it is important to remember the context of the last few years, when we witnessed some of the biggest house price increases the market has ever seen,’ adds Kinnaird. ‘Property prices are up more than £12,000 compared to this time last year and well above pre-pandemic levels (+£46,402 vs March 2020).’
Kinnaird adds that the market is going through a process of ‘normalisation’. Halifax predicts that household finances, the cost of living and the economy will all play a part in determining house price changes in 2023.