Staying positive

Property market expert Kate Faulkner remains upbeat against the downbeat news from the leading indices.

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Bigger than usual New Year bounce after extended year-end lull

“After two months of falls, average new seller asking prices rise again by 0.9% this month, the biggest increase at this time of year since 2020 as New Year sellers test the market. However, average asking prices are still £8,720 lower than their peak in October.”

Stock drops as more vendors quit and prices bounce

“Asking prices across England and Wales surprise; recovering 0.6% during December following the shock drop of -2.4% in November, nudging the year-on-year growth up to 1.9%.”


Sales volumes and prices continue to retreat across the housing market

“The latest feedback on national house prices points to another monthly decline. All regions of England are seeing house prices retreat at present, with the sharpest declines coming across the East Midlands and the South East. By way of contrast, the survey’s price indicator remains marginally positive in Scotland and Northern Ireland, even if these readings are significantly flatter than those seen six months ago.”


2023 begins with further slowing in annual house price growth

“The start of 2023 saw a further slowing in annual house price growth to 1.1%, from 2.8% in December.”


UK house prices stable in January

“The pace of annual growth has continued to slow, to +1.9% (from +2.1% in December), which is the lowest level recorded over the last three years. The average house price is now around £12,500 (-4.2%) below its peak in August last year, though it still remains some £5,000 higher than in January 2022 (£276,483).”


Prices slowing but still increasing on an annual basis in most areas of England and Wales

“On an annual basis house prices recorded for completed transactions in England and Wales increased in January 2023 by 6.0%. This is 1.1% lower than the 7.1% seen in December, and represents the fifth month in succession in which the annual rate of growth has slowed – a sustained downturn. However, even if the rate of price growth is slowing, prices are still increasing, and the current average price of £378,277 thus sets a new record level for England and Wales as a whole.”


House price growth ground to a standstill in Q4 2022

“House price growth stalled in Q4 2022 in response to the 50% drop in buyer demand in the final months of 2022. This will feed into a rapid slowdown in the annual rate of price growth in coming months. At the end of 2022, UK house price inflation had slowed to 6.5% from 8.3%.”

The national picture

National house prices in historical perspective

Kate FaulknerKate says: For anyone spending their time with property indices, it doesn’t take long to notice that property price month-on-month figures are like yo-yos – they basically go up and down all the time. With the Land Registry report, as it’s published before all the data is received; in one exercise we did, we found they varied by +/-2% so they could release data saying prices had fallen, but when all the sales were recorded, they had done the opposite.

Property price month-on-month figures are like yo-yos…

But it’s important not to let a bad news property stat get in the way of a miserable property headline talking about how property prices are falling, despite the fact that our indices show, without exception that property prices are actually up year on year – albeit at lower rates than they were for most of 2022.

It does seem to be a reality that property prices seem to have peaked over the summer of 2022, although some of the indices this month are showing some month-on-month prices stabilising (Halifax) or even rising (Rightmove).

What matters more though is whether a seller can still sell at more than they bought their property for – and in the main they can; whether a buyer can still purchase and although affordability is reduced for the 70% buying with a mortgage, they still can and they are. For those with cash, it’s potentially a good year as they aren’t affected by mortgage rate rises and they won’t be competing with as many buyers as they would have been during the pandemic.

Regional house prices

Kate says: All the indices – bar the Land Registry – are seeing year on year property price growth fall, but the important thing is that they are, year on year still higher for those that bought last year, meaning people are less likely to fall into negative equity this year and even if they do, they are likely to have secured some of the great rates that were available at the start of 2022.

One thing we forget is that it’s not necessarily the cost of a property that we should worry and obsess about, it’s the monthly cost of putting a roof over your head that’s often more important.

From a regional perspective,, Halifax and Nationwide are seeing YoY changes of less than 6% now. It will take some months for the Land Registry to catch up as they measure the data three to six months earlier than other indices.

The only region that is reported to ‘slip’ into YoY falls is from suggesting that London property prices are falling, but it’s not even 1% lower year on year, so quite insignificant.

Overall, we can see that even regional data isn’t that useful to buyers/sellers, this year, the only information that matters is what the local agents and surveyors are reporting on the ground in individual postcodes or indeed roads.

The Regional Picture


“The slowdown in annual house price inflation is reflected in most nations and regions across the UK. Wales, which recorded some of the strongest annual house price inflation over t he last few years, saw its rate of growth fall to +2.0% (from +6.0% in December).

The South West of England has also seen annual house price growth slow considerably, now at +2.7% (vs +6.0% in December). In Northern Ireland and Scotland the pace of annual growth eased more slowly. Those buying a home in Northern Ireland will now pay an average of £183,935 (growth rate of +6.9% vs +7.1% in December), while in Scotland average properties now cost £197,784 (growth rate of +2.4% vs +3.3% in December). London, which for some time has lagged many other areas of the UK in terms of house price growth, saw the cost of buying an average home fall from £541,472 to £530,396 in January, with annual house price inflation flat (0.0%) compared to +2.9% in December.”


Momentum in price inflation falls away quickly

“Most areas recorded small price falls in Q4 2022 as buyers negotiated harder on price. Moreover, the discounts to asking prices to achieve a sale widened quickly at the end of 2022. But this gap between asking and achieved prices is now holding at 3% to 4% and there is no sign of this worsening at this stage.

“This is important because if this gap widens, sellers will feel under increasing pressure to reduce asking prices putting further downward pressure on headline prices. Additional modest price reductions are likely over Q1 2023 as sellers continue to adjust asking prices in line with what buyers are prepared to pay.” 

Towns and cities

Towns and cities house prices

Kate says: Overall, property prices in 24 cities have risen above inflation since 2005, including Bradford, Peterborough and Brighton and Home, three cities are seeing price growth below inflation and two cities remain on par. Even with the price growth seen during the pandemic, what this shows is that, in real terms, especially for those that own outright the property they have isn’t actually delivering from an investment perspective.

Demand and supply

Kate says: What’s critical over the coming months is to stop comparing the various property measures to what happened in 2020, 2021 and 2022 because these were unusual years. What we should be doing is comparing everything to how the market was performing in 2019 and overall, so far this year, according to Zoopla, we aren’t doing too bad.


Martin Lewis imageTo understand where the property market is going it’s essential not to just look at the economic data, but a vital part of the ups and downs of prices in particular is what people think will happen in the market. A pessimistic view and prices are likely to fall faster and further, if many are still fairly positive, then it’s likely, together with the positive economic news we are seeing, the market will fare better than most are expecting. And what better way can we secure some good consumer feedback than a poll from Martin Lewis and his millions of followers! During his housing and mortgage special programme on ITV, he conducted a snap poll, showing a really positive outlook on the market, with 38% expecting prices to be on a par, while a further 32% expected them to be even higher.

It may be that this is a little more positive than the reality as we haven’t started to see many falls – just yet – so it would be interesting to see what people think in six months’ time.

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Demand rebounds in line with pre-pandemic years

“Demand for homes has rebounded in the first few weeks of 2023 but remains well below the levels of January 2020-2022. Current buyer interest is in line with the pre-pandemic years and 10% ahead of 2019.This is not surprising. The last three years have been exceptional with the pandemic reshaping how households think about housing, driving more moves. Higher mortgage rates and living costs as well as weak consumer confidence have brought activity levels back to normal.

“On a regional basis, demand and sales agreed are holding up in the North East, Scotland and Wales where home values are below the national average. Market conditions remain weaker in the South East, South West and the East Midlands, where prices are higher or have grown rapidly over the last two years, exacerbating affordability pressures.”

“The other notable change in recent months has been a continued growth in the number of homes for sale. A scarcity of supply has been a key feature of the market in 2022, adding to the upward pressure on home values. This is now reversing, although the number of homes for sale remains 6% below the five-year average. There is now an average of 23 homes for sale per estate agent, up from a low of just 14 homes in early 2022.

“More supply boosts choice for would-be buyers and will also act to reduce the upward pressure on home prices. A key risk for sales volumes in the year ahead is unrealistic seller expectations. Anyone serious about selling in 2023 needs to make sure their home is competitively priced and in line with what buyers are prepared to spend in the local market. The majority of homeowners have made sizeable gains in their home value over the pandemic, meaning there is more room for realism on pricing.”

House prices - hot or not?


The current state of the owner-occupied housing market: January 2023.

“472,341 properties are currently on the market across the UK. 376,518 properties are sold subject to contract (SSTC) and 269,404 property sales were completed in the last three months.

“The South East was the dominant region across the board in regard to new instructions, sales agreed and exchanges being completed. This was followed by the East of England having the second most exchanges and sale completions. Inner London took second place in regard to new instructions.”

Postcodes – hot or not?

The Advisory track current market conditions so buyers and sellers can gain an independent view of how easy it would be to buy and sell their home in their area. This makes it easier for good agents that are honest about market conditions to value and manage expectations.

For example, in BS6 (Bristol) 72% of the properties on the market are under offer, in contrast, L1 in Liverpool is one of the worst performers according to this index, with only 10% of properties on the market are under offer, showing that ‘average property prices’ can mislead buyers and sellers.

From PropCast’s perspective, the hot markets at postcode level don’t necessarily track the overall increases and decreases seen even at town and city levels, with Bristol, Sheffield and Thatcham having some of the busiest markets, and London and Liverpool (L1) having some of the slower ones.

To find out what’s happening in your postcode visit the House Selling Weather Forecast at

Postcodes - hot or not?

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