July 2023 Update on UK House Prices
The UK property market has experienced a turbulent few years. After the COVID-19 pandemic, followed by the cost of living crisis, it is no surprise that property price rises have slowed down across the United Kingdom. But in some parts of the country, it has been reported that house prices are falling. So, is this true – and if so, in which areas are they falling the most?
When you are looking to downsize your property, or to find a ‘bargain’ in an area which might usually be unaffordable, it is important to know the pricing trends in specific regions across the UK, and whether house prices are falling. We’ve summarised all the key information in our blog below – so keep reading to find out.
Are House Prices falling in the UK?
There are lots of areas in the UK where house prices have fallen – however, this does not apply to every single town and region. Some areas have seen price deductions, while others have continued to increase slightly.
Statistics from the Office for National Statistics found that between April 2022 and April 2023, house prices in the UK increased by 3.5% overall. This demonstrates that the overall market is continuing to trend upwards, even if the rate of this growth varies in different regions – for example, over this time period, there was a 5.5% increase in the north east compared with only 2.4% growth in London.
On the other hand, there are 27 local authorities who have experienced a decline in property prices over the past year.
Where are property prices falling in the UK?
The local authority which has experienced the most significant reduction in property prices over the past year is Kensington and Chelsea. House prices in this area decreased by 15.8% compared to the previous year.
The second most significant price reduction was also in London: in the borough of Westminster. This area experienced a price drop of 13.3%, which is the second most significant in the UK.
Na h-Eileanan Siar, an island off the coast of north west Scotland, experienced the third most significant house price drop, at 7.4.% In fourth place was another Scottish city, but this time on the east coast: Aberdeen, which dropped by 7% over the past year.
In Wales, there were three regions which experienced a fall in property prices. The Isle of Anglesey saw prices fall by 3.1%; Gwynedd saw a reduction of 2.7%; and Ceredigion experienced a decrease of 2.5% over the past year.
Where in the UK are house prices increasing?
According to the same statistics, house prices in the UK have been increasing in many other areas – albeit with some growth more significant than others.
The town with the largest price increase over the past year is East Lothian, just outside Edinburgh, which saw a rise of 17.2% in property prices.
In second place is Fylde in Lancashire, England, which experienced an annual growth of 15.5%. In third was Melton with a growth of 13.3%, and in fourth was Swindon which increased by 12.4%.
These figures demonstrate that the UK property market has been through a strong year in some very specific areas, but has also been an extremely difficult year in other parts of the country.
What will happen to UK house prices over the next year?
Economists disagree over what will happen to the UK housing market over the next twelve months. There is uncertainty regarding interest rates, and whether these will continue to rise or will go back down in the near future – and the answer to this question will have a big impact on the UK’s house prices.
You should speak to estate agents, contact independent housing and financial experts in your area, and consider your personal circumstances, before making a big decision about whether to sell your house or buy a new one.
How many UK homeowners are selling their property?
Data from HMRC shows that less people are selling their property at the moment than they were two years ago. This is because, in 2021, most buyers were keen to take advantage of the cut to stamp duty, and this resulted in the UK property market being extremely active.
Since then, the number of house sales has continually dropped. The latest data from HMRC shows that approximately 67,220 transactions were completed in April 2023, which is a decrease of 32% compared to the same month in 2022.
What’s happening to property prices in Northern Ireland?
According to Land & Property Services, who were assisted by the Northern Ireland Statistics and Research Agency, house prices decreased in Northern Ireland throughout the end of 2022 and the beginning of 2023. The figures showed that from October 2022 to March 2023, the house price index decreased by 1.8%. According to the Belfast Telegraph, this is the largest quarterly decline for the country in the past decade.
The same figures showed that during the first three months of 2023 in Northern Ireland, there was approximately 4,280 residential houses sold. The average property price in Northern Ireland is £172,005, with the price range varying from £148,548 in Derry City up to £204,122 in Lisburn and Castlereagh.
Shall I invest in property now?
There are several important factors you should consider before deciding whether to invest in property. It will depend on your financial goals, your circumstances, the time you are able to commit, and your tolerance for risk.
Financial situation
Purchasing a house is one of the most significant financial commitments an individual can make. Before purchasing, you need to calculate whether you can truly afford it. You could also weigh up your potential return on investment to decide whether it is worthwhile.
Time commitment
Buying a property typically involves a hefty time commitment, and you should therefore make sure that you can allow for this. If you don’t have the time required to manage your property, then you may need to bring in a letting agency to do it for you.
Risk tolerance
Just like any investment, purchasing a house involves a certain degree of risk. You should consider your risk tolerance before investing in property, as this may impact what you do or don’t opt for. We Buy Any Home are cash house buyers that can purchase your property within 7 days. Contact us today for a no-obligation conversation.
