The slowing of the property market in the UK continues through November 2022 according to the latest data from Halifax Bank. The major mortgage lender recorded an average UK house price fall of -2.3% over the course of the month, compared to -0.4% recorded in October.
All nations and regions, except north east England, saw the rate of annual growth slowing last month. The typical UK property now costs £285,579, down from £292,406 in October.
Kim Kinnaird, director at Halifax Mortgages, says: "Average house prices fell in November as the rate of annual growth slowed further to +4.7%, from +8.2%. The monthly drop of -2.3% is the largest seen since October 2008 and the third consecutive fall."
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During the Covid-19 pandemic, Wales was the UK nation and region continually recording the highest monthly year-on-year increase in the average house price. This rapid growth resulted in a journey of a continuing record average house price in Wales, each month smashing the record of the previous month.
At this time, the over-heating UK property market also experienced a 'full house' which last occurred in March 2007 and is when all regions across the UK experience a record average house price.
But the latest data from Halifax tells a very different story. The increase over the last year has dropped to 7.9% when last month it appeared house prices had grown 11.5% over the previous 12 months. The new average price is £220,689 and indicates a significant slowdown.
This decrease in Wales, along with the South West region, is the sharpest drop of annual growth in the two regions that were the key hotspots of house price inflation during the pandemic. This suggests that previous drivers of the market such as the 'race for space' and heightened demand for rural and coastal living are now receding, but some industry experts are calling for context when considering the latest data.
Iain McKenzie, CEO of The Guild of Property Professionals, says: "The November figures confirm what the industry has been seeing on the ground - house prices are falling, but not at the dramatic rate we might have expected after the recent economic upheaval.
"It's important to keep a sense of perspective and remember that property prices soared massively during the pandemic, meaning that these decreases are minor in comparison. The average home is still worth £45,000 more than it was in March 2020.
"The limited supply of housing is one of the main factors keeping the reins on falling prices. The unprecedented demand we have seen in the last couple of years has meant that estate agents have been scrambling to replenish their stock.
"The cost of living crisis will be the determining factor to control house prices in the months ahead. Mortgage affordability, as well as living costs, will affect how confident buyers are when it comes to committing to buying a new home.
"With nearly one in three property purchases ‘needs-based’ due to changing personal circumstances, the market will not grind to a halt, but pricing will be paramount to achieve a sale as the market swings back in the favour of buyers."
Kim Kinnaird from Halifax Bank adds: "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.
"Property prices are up more than £12,000 compared to this time last year, and well above pre-pandemic levels. The market may now be going through a process of normalisation.
"While some important factors like the limited supply of properties for sale will remain, the trajectory of mortgage rates, the robustness of household finances in the face of the rising cost of living, and how the economy – and more specifically the labour market – performs will be key in determining house prices changes in 2023."
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