Falling and rising house price areas l Vesta blog

Falling and rising house price areas

September 13, 2023

Our commitment to you is to provide the most accurate and up-to-date information to help guide your property investment decisions. We have analysed both Zoopla's and Nationwide's latest House Price Index for August 2023, to bring you a holistic view of the UK housing market.

Overview of Nationwide's August 2023 findings:

  • Monthly change: House prices fell 0.8% month-on-month
  • Annual change: House prices are now 5.3% below their August 2022 peak, representing an annual fall of approximately £14,600 on a typical home
  • Average price: The average non-seasonally adjusted price was £259,153

According to Robert Gardner, Nationwide's Chief Economist, the decline in price can be attributed to the rise in borrowing costs, which has led to a fall in mortgage approvals and overall market activity. He also highlighted that activity in the housing market is well below pre-pandemic levels, with mortgage applications remaining weak.

Cash transactions are more resilient
  • Completed housing transactions in H1 2023 were nearly 20% below pre-pandemic (2019) levels
  • Cash purchases were more resilient, up by 2%, while purchases involving a mortgage have slowed much more sharply
Shift in buyer preferences
  • There's a shift towards smaller, less expensive properties like flats, likely due to the ending of the Help to Buy scheme and increased affordability pressures. This might also be linked to many people returning to the office through choice or with many businesses changing their approach to working from home policies. 

The north-south divide: a deeper analysis (excludes Scotland)

Top 10 areas with the most significant declines in the South
  1. Harrow, London: -2.7% (average price: £512,900)
  2. Three Rivers, South East: -2.5% (average price: £581,500)
  3. Southend-on-Sea, East of England: -2.4% (average price: £328,600)
Top 3 areas with the most significant gains outside the South
  1. Calderdale, Yorkshire and the Humber: +4.3% (average price: £171,600)
  2. Flintshire, Wales: +2.3% (average price £174,500)
  3. Cheshire West and Chester, North West: +2.3% (average price £248,300)

What does this mean for you?

  • For sellers: Given Nationwide's date on declining house prices, consider if it is the right time to sell, and if you do need to sell you will need to appreciate the price you can achieve in the current market conditions.
  • For buyers: Lower prices and the decline in mortgage applications could mean less competition and more negotiating power. That said, some areas are still very attractive to renters and high yields are still achievable so you will not always get a discount, so do your homework!
  • For all investors: Cash transactions show resilience, making it an ideal time for cash investments, particularly in areas showing growth. You can get better deals with cash, so if you can take advantage make sure you get valuations so that you are able to refinance if required when conditions and rates improve. 

Note: All information above is based on Zoopla's and Nationwide's House Price Index for August 2023 and ChatGPT has been used to undertake the analysis, so this is intended for general guidance only.

Important Note

All information contained in this website is provided as a guideline only, is based on estimates and assumptions, may not be accurate or complete, and is subject to change. We make no representations or warranties with regards to this information, expressed or otherwise. A buyer who relies on such information does so at their own risk. Buyers are advised to seek independent financial advice and should undertake their own due diligence.

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