Oct 23, 2023

Why Are UK House Prices Still Falling in 2023?

In the ever-evolving landscape of the UK property market, it’s crucial to stay informed about the latest trends and developments. As we navigate through autumn and winter 2023, the question on many minds is, why are UK house prices still falling?

At Henley Charles, we are committed to providing support and guidance to those facing uncertainties in the housing market. In this article, we’ll delve into this pressing issue, shedding light on the factors at play and what it means, particularly for first-time buyers.


The current state of UK house prices

To comprehend why house prices are continuing to fall, it’s essential to start with the latest data. The average UK house price has indeed seen a decline in recent months. As the property market adapts to various economic challenges, it’s essential to keep a close eye on these numbers.

Over the last year, UK house prices have risen a total of 0.1%; this is the slowest growth rate we’ve seen since 2012. London has seen the most significant impact in the current cost of living crisis, with houses falling around -0.1% on average.

Mortgage interest rates are higher than ever, decreasing demand from both current home owners who were previously looking to relocate or buy additional property, as well as first time buyers.


What is causing UK house prices to fall?

One of the significant factors contributing to falling house prices is the ongoing cost of living crisis. Rising inflation and the increasing prices of essential goods and services have put pressure on household budgets. As a result, many individuals are reluctant to make significant financial commitments, such as purchasing a home.

Demand from buyers is lower on average, meaning the number of property sales is also down compared to when we look at figures from this month in previous years. This leads to minimal house price growth, and even in some parts of the country, falling house prices.

First-time buyers also account for a third of sales, most of whom were previously renting. But for the first time in 13 years, rent is seemingly cheaper than a monthly mortgage repayment. This is discouraging first-time buyers and dissuades many of them from climbing onto the property market in such an unsettling financial climate, resulting in house price falls/slower growth.


The impact of falling house prices on first time buyers

The impact of falling house prices on first-time buyers is both complex and nuanced. On one hand, lower prices might seem like a boon, offering easier entry into the property market.

However, the cost of living crisis can counteract this advantage, making it challenging for first-time buyers to save for a deposit. Moreover, uncertainty can lead to hesitation, with some potential buyers adopting a wait-and-see approach.


Top tips for property buyers and sellers

For buyers, it’s crucial to remain vigilant and well-informed. While falling house prices might be advantageous, it’s essential to assess your personal financial situation carefully.

For sellers, setting the right asking price and presenting your property in the best possible light becomes even more critical during market fluctuations. Our experts can assist you in making informed decisions at every step.

At Henley Charles, we understand the unique challenges and opportunities presented by the evolving property market in Autumn 2023. Our experienced team of estate agents in Birmingham is here to guide you through these uncertain times. Whether you’re a first-time buyer, seller, or an experienced investor, we can provide tailored advice to suit your needs.

The UK property market is experiencing a unique set of challenges in Autumn 2023 which is taking a toll on individual’s financial health, mental wellbeing and confidence in their future of getting on the property ladder.

Looking for a house and wondering if you’ll ever be able to stop the cycle of renting and put your name to a property can be exhausting and stressful. The importance of having equity and signing your name to a property has been ingrained in us for years, and the prospect that this might no longer be viable for some individuals is worrying.

Falling house prices, coupled with the cost of living crisis, demand a cautious and informed approach from both buyers and sellers. At Henley Charles, we’re here to provide the guidance and support you need to navigate these uncertainties successfully.

If you have questions or concerns about falling house prices and how they might impact your property journey, don’t hesitate to reach out to Henley Charles. Our dedicated team of agents is ready to assist you. Contact us today to discuss your specific needs and explore your options in this evolving market.