House prices slid in December, capping the largest quarterly drop since the financial crisis more than 10 years ago, data from mortgage lender Halifax showed on Friday.
The average house price fell by 1.5% month-on-month in December, following a 2.4% fall in November and marking the fourth consecutive monthly decline, Halifax said.
In quarterly terms, house prices fell 2.5% – the biggest drop since the three months to February 2009.
Kim Kinnaird, Director, Halifax Mortgages, said:
“In December, the cost of the average UK home was £281,272, a fall on the previous month of 1.5%, with annual growth slowing to +2% (from +4.6%). However, the fall in December was lower than the monthly decline of 2.4% recorded in November, even taking into account seasonal slowdown driven by the festive period.
“As we’ve seen over the past few months, uncertainties about the extent to which cost of living increases will impact household bills, alongside rising interest rates, is leading to an overall slowing of the market.
“The housing market was a mixed picture in 2022. We saw rapid house price growth during the first six months, followed by a plateau in the summer before prices began to fall from September, as the impact of cost of living pressures, coupled with a rising rates environment, began to take effect on household finances and demand.
“These trends need to be viewed in the context of historic prices. The cost of the average home remains high –greater than it was at the start of 2022 and over 11% more than house prices at the beginning of 2021. The first half of last year was a very strong period for sellers, between January 2022 and August 2022, the average cost of a home rose by over £17,000 to £293,992 (growth of 6%), setting a new record high.
“As we enter 2023, the housing market will continue to be impacted by the wider economic environment and, as buyers and sellers remain cautious, we expect there will be a reduction in both supply and demand overall, with house prices forecast to fall around 8% over the course of the year. It’s important to recognise that a drop of 8% would mean the cost of the average property returning to April 2021 prices, which still remains significantly
above pre-pandemic levels.”
