House prices fell for fourth consecutive month in December, finds Halifax House Price Index

The average house price fell -1.5% in December 2022 against the previous month, according to data from mortgage lender, Halifax.

The December fall is the fourth consecutive month to see the average UK house price come down in value and now stands at £281,272 according the Halifax House Price Index, now in its 40th year. Despite this decline, property values remain 2% above what they were at the start of 2022.

At a regional level, annual house price inflation also slowed in all parts of the UK, but remains highest in the West Midlands and Northern Ireland, which have both seen property prices grow on average by more than 7% over 2022.

Kim Kinnaird, Director, Halifax Mortgages, explained:

“In December, the cost of the average UK home was £281,272, a fall on the previous month of 1.5%, with annual growth slowing to +2% (from +4.6%). However, the fall in December was lower than the monthly decline of 2.4% recorded in November, even taking into account seasonal slowdown driven by the festive period.

“As we’ve seen over the past few months, uncertainties about the extent to which cost of living increases will impact household bills, alongside rising interest rates, is leading to an overall slowing of the market.

“The housing market was a mixed picture in 2022. We saw rapid house price growth during the first six months, followed by a plateau in the summer before prices began to fall from September, as the impact of cost of living pressures, coupled with a rising rates environment, began to take effect on household finances and demand.

“These trends need to be viewed in the context of historic prices. The cost of the average home remains high – greater than it was at the start of 2022 and over 11% more than house prices at the beginning of 2021. The first half of last year was a very strong period for sellers, between January 2022 and August 2022, the average cost of a home rose by over £17,000 to £293,992 (growth of 6%), setting a new record high.

“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% over the course of the year. It’s important to recognise that a drop of 8% would mean the cost of the average property returning to April 2021 prices, which still remains significantly above pre-pandemic levels.”