UK House Prices Fall for Sixth Month Running

Oct 12, 2023

The UK property market, including property investment, has seen a decline in house prices in recent months due to rising interest and the cost of living crisis. This has impacted people’s spending power significantly. However, some experts predict that the market will stabilize in the coming years as the economy improves.

In this blog post, let’s delve into the factors that could influence the trajectory of UK house prices. Outlining the recent 4.7% annual drop recorded in September by Halifax, Britain’s largest mortgage lender. This significant decrease, the largest observed since 2009. Also marking the sixth consecutive monthly drop in house prices. Stay tuned as we explore the impact of soaring mortgage rates and the development of a ‘buyer’s market’ in more detail.

A ‘buyer’s market’ is a term commonly used in the property sector to describe a situation where the supply of properties exceeds the demand of buyers. When this happens, buyers have more choice and negotiating power, often leading to lower prices or better terms. In a ‘buyer’s market’, properties may take longer to sell, and sellers may become more willing to negotiate to close a deal. This shift in the market balance can occur due to various factors, including economic conditions, interest rates, and consumer confidence.

The Current State of the UK House Prices

In response to the latest figures from Halifax, estate agents and property experts remain cautiously optimistic that the market is moving in the right direction and that price falls could start to slow.

The UK housing market has shown resilience this year, with house prices remaining stronger than expected. Despite higher mortgage rates affecting market activity. Although property prices are currently £14,000 lower than the peak in August 2022, they are still 1% higher compared to December 2021. This was when the Bank of England first raised interest rates from 0.1% to 0.25% according to Forbes.

Source: Nationwide – Annual percentage change in UK house prices

Key Factors That Could Influence a Price Drop

Now, to the burning question: will the UK house price crash happen? Opinion is still split on whether there will be a full-blown house price crash. However, several indicators could signal a potential price drop. Some of these include:

Rising Interest Rates

In September 2023, the Bank of England decided to keep the Bank Rate unchanged at 5.25%. This move aimed to provide some relief to mortgage holders and give hope that borrowing costs have reached their peak in the fight against inflation. The Bank of England has hinted at possible interest rate hikes in the near future. With higher interest rates, mortgages could become more expensive, potentially dampening demand for homes and slowing down price growth.

Source: Statista – Average inflation rate and central bank interest rate in the United Kingdom from January 2018 to August 2023

Changes in Government Policy

Government policies, like the stamp duty holiday, have had a big impact on the housing boom lately. Any changes to these policies could affect the market. For example, if the stamp duty holiday ends, we might see a drop in demand and prices.

Economic Uncertainty

Economic uncertainty, often driven by factors such as Brexit or global events, can influence buyer behaviour. If people are uncertain about their financial futures, they may be less inclined to take on large debts like a mortgage. This in turn could affect housing demand and prices.

Source: Zoopla

What Do the Experts Say?

House prices crashing doesn’t seem likely at the moment. However, it’s expected that house price growth will slow down. With some areas even seeing minor price corrections. So, while the recent dip in house prices could be concerning for some…it doesn’t necessarily mean there’s going to be a house price crash.

The long-term outlook for UK housing is positive, with experts predicting a gradual recovery and market stabilisation. Interestingly, there’s a noticeable trend where buyers are increasingly going for smaller properties and showing less willingness to pay inflated asking prices.

Jason Tebb, CEO at, commented: “As the decline in average property prices continues, the high cost of living and numerous rate rises have understandably impacted how much buyers are willing and able to pay.

“However, given all the economic uncertainty it is remarkable how relatively stable the market appears to be as we head into what tends to be a busier period in the run-up to Christmas. September’s hold in interest rates has bolstered stability and confidence, with many borrowers hoping that we have seen the peak in base rate and that the worst of the pain is behind us.

“There may be fewer buyers than during the stamp duty holiday but those who are out there are committed and focused on moving. As well as not being speculators, they are price sensitive, so sellers must be sensible when it comes to pricing if they wish to achieve a timely sale.”

Source : Property Industry Eye

Source: Yopa

House Price Crash: No Cause for Panic

While it’s good to keep an eye on these factors, it’s important to remember that a big crash in house prices isn’t necessarily on the horizon. The housing market is influenced by a complex web of factors, and changes often happen gradually.

If you’re thinking of buying a home, don’t let fear of a crash hold you back. Instead, make informed decisions based on your personal situation and long-term goals. And if you’re a homeowner worried about your property’s value, remember that real estate is usually a long-term investment. Short-term ups and downs are part of the journey and don’t necessarily affect the long-term value of your home.

Is Property Still a Good Investment in 2023?

Despite the downward trend in house prices, property remains an attractive investment option. This is especially true for long-term investors. As well as for buy-to-let investors who plan to hold onto their properties for a while. While a temporary drop in prices may worry some, it’s important to remember that the property market naturally goes through cycles.

Slumps are often followed by periods of significant growth. So having patience can lead to impressive returns. So, even though the market dynamics in 2023 may seem discouraging at first, they could actually present a great buying opportunity. Especially for those with a long-term perspective.

Embracing Opportunities During Market Fluctuations

Despite all the negative media buzz around the real estate market, it’s important to keep in mind that different regions have their own story. Let’s take the North of England, for instance. It has consistently shown a different trend. Manchester, in particular, has seen property values steadily rise. This city, with its vibrant culture and thriving businesses, has remained strong and even experienced growth during the nationwide downturn. In fact, Manchester has been leading the pack in terms of house price growth among major UK cities.

While the rest of the country saw prices increase at an average rate of 0.2% per month. Manchester recorded an impressive 0.5% per month in the post-pandemic period. The resilience of such regions highlights the diverse nature of the property market and the impact of local factors on trends. Overall, if you’re looking for long-term growth, Manchester is considered one of the top investment locations.

Source: Hometrack

Making well-informed decisions is crucial. With Rothmore Property by your side, we’ll be there to guide you through every step of the buying process. Our expert consultants have extensive knowledge of the Manchester market and can provide valuable market advice to help you make the best choices. Check out our website here.

An Ever-Changing Market

In conclusion, after carefully analysing current indicators, it’s clear that the UK housing market is set for some ups and downs. However, based on the available data, a major crash doesn’t seem likely at this point. To successfully navigate these changes, it’s important to stay informed about market trends. Consider personal circumstances, and make decisions that align with long-term goals.

At Rothmore Property, we’re here to guide you on your investment journey and answer any questions you have. So why wait? Get in touch with us today!

Manchester Property Investment



This guide is intended solely for informational purposes and should not be considered as investment advice. For those in search of financial guidance, it is advisable to consult with a financial advisor authorised by the FCA, to receive regulated advice tailored to your investment choices.

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