The average UK house price fell by around £4,000 in the 12 months to December 2023, according to official figures.
The Office for National Statistics (ONS) show that property values fell annually by 2.1 percent in England and by 2.5 percent in Wales.
House prices increased annually by 3.3 percent in Scotland and by 1.4 percent in Northern Ireland.
Within England, house prices in the North West recorded the highest annual percentage increase over the 12 months to December 2023 (1.2 percent), while London had the biggest fall in house prices (falling by 4.8 percent).
The average house price was £285,000, down £4,000 in a year, and the average London prices were £508,000, down 4.8 percent in a year.
The West Midlands was the only other English region to record an annual increase in house prices, at 0.3 percent.
Aimee North, head of housing market indices at the ONS, said: “Our initial estimate of UK house prices shows another annual fall in December, however, the pace of decrease has slowed since the previous month.
“Our latest figures also show a return to annual price growth for two English regions: the North West and West Midlands.
“Meanwhile the annual rise in UK private rental prices remains unchanged at a record-high level for the second consecutive month.”
Sarah Coles, head of personal finance, Hargreaves Lansdown: “2023 was a tough year for property, but there was a glimpse of hope as it drew to a close. House prices were still falling, but those drops decelerated after mortgage rates were cut.
“As cheaper deals hit the market at the start of 2024, optimism became more widespread, and some buyers were persuaded back to the market. However, it’s vital that buyers and sellers don’t get dazzled by this flash of hope.
“Slower price falls in December reflect the fact that these sales were agreed when mortgage rates were falling. According to Moneyfacts, the average two-year fix hit a high point of 6.85 percent in August, before dropping back to 5.62 percent in January.”
The ONS said private rental prices paid by tenants in the UK rose by 6.2 percent in the 12 months to January 2024, unchanged for the second consecutive month.
The annual rate represents the joint-highest annual percentage change since the records started in January 2016.
Annual private rental prices increased by 6.1 percent in England, seven percent in Wales and 6.8 percent in Scotland in the 12 months to January 2024.
The 6.8 percent increase in Scotland is the highest annual rate since the Scotland data started in January 2012.
Rents in London increased by 6.9 percent annually – representing the joint-highest annual percentage change since London records started in January 2006.
Sarah Coles, head of personal finance, Hargreaves Lansdown: “There are broader challenges on the horizon. We’re on the brink of recession, redundancies are on the rise, and there’s every chance that life gets tougher before it gets better.
“Throughout all the turmoil of recent years, the property market has been underpinned by a robust labour market. If we see this start to weaken, it won’t bode well.
“It means buyers need to consider their finances in the round before taking the plunge. Beyond the money saved for your deposit, you need an emergency savings safety net to fall back on in tougher times.
“These emergency funds are often depleted while you’re buying, but with so much uncertainty around, it’s a good idea to keep whatever you can in an easy access account in case life proves tougher than expected.
“At the moment, you can make more than five percent in an account with a newer bank, building society or savings platform, so you can make a decent interest rate into the bargain.”
