- Typical UK property now costs £281,684 (compared to £281,713 last month).
- Follows falls in December (-1.3%) and November (-2.4%).
- Annual rate of house price growth slowed to +1.9% (from +2.1% in December).
- Rate of annual growth slowed in all nations and regions during January.
Kim Kinnaird, Director, Halifax Mortgages, said:
“The start of 2023 has brought some stability to UK house prices, with the average house price remaining largely unchanged in January at £281,684, a very small decrease on December. This followed a series of significant monthly falls at the end of last year (-1.3% in December and -2.4% in November).
“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).
“We expected that the squeeze on household incomes from the rising cost of living and higher interest rates would lead to a slower housing market, particularly compared to the rapid growth of recent years. As we move through 2023, that trend is likely to continue as higher borrowing costs lead to reduced demand.
“For those looking to get on or up the housing ladder, confidence may improve beyond the near-term. Lower house prices and the potential for interest rates to peak below the level being anticipated last year should lead to an improvement in home buying affordability over time.”
Nations and regions house prices
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 the last few years, saw its rate of growth fall to +2.0% (from +6.0% in December) with an average house price of £210,275 (down from a peak of £224,210 in August).
The South West of England has also seen annual house price growth slow considerably, now at +2.7% (vs +6.0% in December) with an average house price of £298,853 (dipping below £300,000 for the first time since March last year).
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. The price of a typical London home is still around a quarter of a million pounds above the UK national average.