How much have house prices gone up in YOUR area? Interactive tool reveals London property values have plunged… while homeowners in lots of other places have seen healthy RISES

• UK house prices have slumped on average by £3,000 over the past 12 months 
• At the same time, private sector rents have rocketed by more than six per cent 

Average house prices in the UK have slumped by £3,000 over the past 12 months, and the rate of decline is increasing, new figures released by the Office for National Statistics have shown. 

In the 12 months to October 2023, house prices in Britain have fallen by 1.2 per cent. The equivalent figure for the 12 months to September 2023 showed a fall of 0.6 per cent. 

At the same time, private sector rents have rocketed by more than 6 per cent.  

According to the figures  collated by the ONS and the Land Registry, the average price of a house in the UK is now £288,000, compared with £291,000 a year ago. 

However, there are some significant regional variations, with prices in England falling by 1.4 per cent to £306,000, and Wales decreasing by 3 per cent to an average of £214,000. 

But in Scotland, the market showed a slight 0.2 per cent increase to an average of £191,000. 

Search for YOUR local area in this widget from Purplebricks below, and find out how house prices have changed over the last 12 months. 

Every region in England saw property prices fall apart from the North East, which showed a 0.2 per cent increase.

In London, prices dropped by 3.6 per cent over the past 12 months. 

In October 2022, the average price of a house in the capital was £541,720, but this has fallen back to £515,504 – a drop of £26,216. 

With new buyers in London paying on average £2,340 a month for their mortgage, their payments are almost being wiped out by the dramatic decrease in house prices.   

Sam Mitchell, CEO of Purplebricks said: ‘It is interesting to look at some of the factors that can make house prices in certain areas vary from the average trend.

‘Certain London boroughs have been a particular hotspot for several years and prices there have doubled since 2015. This big yearly drop is likely to be just levelling off to a more realistic figure.

‘At the other end of the spectrum, places further away from big cities are seeing a surge in demand from people who want to live there but still be able to have a reasonable commute.’

The figures showed how London boroughs such as Westminster and Hammersmith and Fulham have seen £70,000 wiped off the price of property in 12 months. 

Hammersmith, which is home to Hugh Grant, has seen a 10 per cent drop in the price of houses, according to Purplebricks. 

An average home owner in Hammersmith and Fulham wakes up in the morning with a house worth £200 less than when they went to bed the night before. 

Other major losers are those in Westminster – where the average house is worth £900,000 – which has seen a decline of 7.8 per cent. 

In Kensington and Chelsea, where homes cost on average £1.3m, owners have seen their investments drop by almost 6 per cent. 

However, in the commuter belt around the capital, there have been some significant increases in house prices. 

Prices in Oxtead, Surrey are increasing on average by £1,000 a week, while areas such as Rutland, Sevenoaks and Richmond-upon-Thames have seen annual growth between £40,000-£45,000. 

According to the Bank of England, in October, individuals repaid on net £100m of mortgage debt compared to £1bn of net repayments in September. 

The Bank of England said the fall in house prices could be linked to interest rates which currently stand at 5.25 per cent. 

At its Monetary Policy Committee meeting last week, the MPC voted by 6-3 to keep interest rates at that level. The three people who voted against that proposals wanted hike rates further to 5.5 per cent to reach the 2 per cent inflation target more rapidly. 

Commenting on the latest house price figures, Verona Frankish, CEO of Yopa said: ‘While we’ll be glad to see the back of what has proved a testing year for the UK property market, it’s a year that, at least, looks to be finishing on a positive note with market activity starting to build.

‘The market has been stabilising since the first decision to hold interest rates and last week’s decision to do so for the third consecutive time will only help build market momentum ahead of the new year.

‘2024 already looks to be a far more promising one, with stability returning and the hope of an interest rate reduction also likely to bring buyers back into the fold.’

Director of Benham and Reeves, Marc von Grundherr, added: ‘Like most of us during the closing stages of the year, the UK property market remains a tad lethargic with no real movement planned until the new year comes.

‘House prices continue to sit marginally below the previous record highs seen on an annual basis but have held their own given the turbulent year we’ve faced.

‘We are starting to see murmurs or a return to form though and as buyers and sellers dust themselves down in the new year, we expect business to resume as usual.’

The figures were released as a separate ONS report indicated that private rental prices have been rising at a record rate.

Within London, house prices have been falling at the fastest rate since 2009, while private rental prices have been rising at their fastest pace since at least 2006.

Annual growth in house prices has been generally slowing since July 2022, when it was 13.8 per cent.

The average UK house price was £288,000 in October 2023 – £3,000 lower than 12 months earlier.

ONS head of housing market indices Aimee North said: ‘London saw the steepest fall in average house prices and its annual inflation rate now stands at its lowest level since 2009.

‘While housing prices are generally falling, the surge in rental prices continues with another record-breaking increase in the year to November.’

The ONS’s latest report cautioned that house sales used to calculate the index have been considerably lower recently than historically. This may lead to revisions being larger than usual in the coming months.

Meanwhile, its rental sector report said that private rental prices paid by tenants in the UK rose by 6.2 per cent in the 12 months to November 2023, accelerating from 6.1 per cent in the 12 months to October 2023.

The 6.2 per cent rise represents the largest annual percentage change since the UK records started in January 2016.

In London, rents rose by 6.9 per cent annually – the highest annual percentage change in private rental prices since the London records started in January 2006.

The ONS also released figures on Wednesday showing that UK inflation eased back to its lowest level for more than two years last month.

The rate of CPI (Consumer Prices Index) inflation slowed to 3.9 per cent in November, from 4.6 per cent in October – the lowest level since September 2021. The latest figure was lower than many economists had been expecting.

Nicky Stevenson, managing director at estate agent Fine & Country, said: ‘After a bumpy start to 2023, the property market is looking increasingly buoyant, and today’s steeper than expected drop in inflation is likely to drive greater activity in the early part of next year.’

Andrew Montlake, MD of Coreco mortgage brokers, said: ‘The latest fall in inflation will bring some early Christmas cheer to both policy makers and consumers alike.

‘This will no doubt have an impact on swap rates which in turn will allow mortgage lenders to continue to reduce their product offerings as the January mortgage sales look set to become even more intense.’

Mr Montlake also suggested that the Bank of England base rate could be cut ‘sooner rather than later’, adding: ‘This also has implications for the property market as a whole and we could see prospective buyers return to the market in earnest early next year.’

Nick Leeming, chairman of estate agent Jackson-Stops, said ‘a minimal drop of just 1 per cent’ annually in the average UK house price ‘is the clearest example of the property market’s enduring strength despite riding the real estate rollercoaster’.

He continued: ‘What we expect to see is a minor reduction in property values overall next year, but no great dips as we have seen from 2023 the strength that underpins our bricks and mortar.

‘Some house prices will be back in line with pre-pandemic levels, allowing for a fairer playing field for both buyers and sellers. With the prospect of interest rates going down next year and a greater pipeline of supply emerging in the spring, there is reason to expect a stronger market as the year progresses.’

He said that, with the prospect of a general election on the horizon, ‘this may prompt more buyers and sellers to sit and wait, with pre-election uncertainty often impacting domestic economic confidence. It is important that throughout the year, sellers continue to accept realistic valuations, reflecting a market that has greater competition once again.’

Jeremy Leaf, a north London estate agent, said: ‘Buyers and sellers are taking heart from the pause in interest rate rises and falls in mortgage payments and inflation, as well as continuing strong employment.

‘Looking forward, the signs for the new year are more promising than they may have been only a few short months ago.’

Steven Hargreaves, mortgage and protection adviser at Leeds-based broker the Mortgage Co, told website Newspage: ‘We are seeing an increase in first-time buyer inquiries, which is very encouraging, especially in comparison to the previous 12 months. Increased confidence due to falling inflation and lower mortgage rates is having a material impact on first-time buyers returning to the market.

‘Supply is still an issue, however, traditionally we do not have an influx of new properties to the market until early January.’