House prices in the United Kingdom declined for the fourth successive month in December, as the increasing cost of living along with high interest rates led to an overall slowdown in the housing market, survey data from the Lloyds Bank subsidiary Halifax showed on Friday.
The house price index dropped 1.5 percent month-on-month in December, following a 2.4 percent decrease in the prior month.
Meanwhile, annual growth in house prices eased further to 2.0 percent in December from 4.6 percent in November.
“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 percent over the course of the year,” Kim Kinnaird, director at Halifax Mortgages, said.
Uncertainties about the extent to which cost of living increases will impact household bills, alongside rising interest rates, continue to lead to an overall slowing of the market, as seen over the past few months, Kinnaird said.
The average property price was GBP 281,272 in December, down from GBP 285,425 in November.
Among regions, the North East experienced the greatest annual slowdown in growth, with a house price increase of 6.5 percent a year. Eastern England, West Midlands and Wales experienced the smallest falls in growth rate.
London house prices grew 2.9 percent annually, which was slower than the 5.0 percent increase in November.
Considering 2022 as a whole, the UK housing market was a mixed picture with a rapid price growth during the first half, followed by a plateau in the summer before prices began to fall from September, as the impact of cost of living pressures, coupled with rising rates, began to take an effect on household finances and demand, Kinnard added.
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