Land Registry: House prices ended 2022 in negative territory
Annual house prices growth slowed in December and ended the year negative on a monthly basis, the latest Land Registry figures show.
The latest Land Registry House Price Index, assessing property market activity in December 2022, show annual growth slowed to 9.8% from 10.6% a month before.
Prices dropped by 0.4% on a monthly basis, putting the average UK house price at the end of 2022 at £294,329.
House price annual growth was strongest in the East Midlands where prices increased by 12.3% in the 12 months to December 2022.
The lowest annual growth was in Scotland, where prices increased by 5.7% in the 12 months to December 2022.
London was the English region with the lowest annual growth, where prices increased by 6.7% annually.
The monthly regional picture was less impressive though with prices dropping in four out of nine English regions.
House prices fell by 1.8% on a monthly basis in the South Werst, by 0.8% in the East, 0.5% in the North East and 0.1% in the North West.
Prices were flat on a monthly basis in London and the West Midlands.
Commenting on the data, Frances McDonald, research analyst at Savills, said:
“This sits against the backdrop of a significant fall in mortgage approvals in December and highlights the turbulence in the mortgage markets at the end of 2022, following September’s mini-Budget.
“Our expectation is that this will represent a low point for transactions and since then we have seen stabilisation in the mortgage markets and, in particular, a fall in the cost of fixed rate mortgages.
“For someone borrowing a 75% mortgage, the average quoted two-year fixed mortgage rate was 5.17% in January 2023, down from 6% in October 2022, despite a tenth successive base rate increase in February.
“The fall in the cost of fixed-rate mortgage debt is likely a reflection of lenders trying to capture a greater share of a smaller mortgage market, but there is also an increasing expectation that inflation has peaked and that Bank base rate is likely to start coming down in 2024.
“But borrowers still face a considerable increase in their mortgage costs, whether new entrants to the market or those coming off of a fixed rate deal, which means we likely haven’t seen the end of house price falls.
“We do expect them to continue to be more modest in the less mortgage-dependent prime markets.”
Nathan Emerson, chief executive of agency trade body Propertymark, added:
“As we moved into 2023, buyers and sellers were, and still are, well placed to take advantage of the ongoing positive shift in a more sensible market.
“Throughout 2022, our member agents saw a steady flow of new instructions with the usual traditional dips noted in December including a small drop in the total number of properties available for sale.
“Buyers are entering a less competitive market with competition dropping by over a third, which works well in their favour, but for sellers, house prices are still higher than this time last year, meaning they will see a comfortable gain when looking to move.”
Kindly shared by Estate Agent Today
Main article photo courtesy of Pixabay
