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UK HPI falls for first time in 11 years – “but dark clouds finally beginning to part” – reaction to latest ONS property news

by | Nov 15, 2023

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Following news that the latest UK House Price Index has just been published by the ONS, mortgage and property experts have been sharing their thoughts on what it might mean for the market in the weeks and months to come as follows:

Jonathan Hopper, CEO of Garrington Property Finders, comments:

“The oil tanker has finally begun to turn. Months of price cutting on the property front line have at last been reflected in the official figures.

“A 0.1% drop in average house prices over 12 months might sound small beer, but it’s worth noting that this is the first time prices have retreated on an annual basis for more than 11 years. As recently as summer last year, they were rising at a gravity-defying 13.8%.


“Yet while the lag in the ONS data means it’s likely to show further falls in coming months, the dark clouds that have been parked over the property market for the past year are beginning to part. For some sectors of the market, the correction may soon be complete.

“This morning’s big fall in consumer price inflation has given sentiment a welcome shot in the arm. The share prices of several major housebuilders have risen as the markets bet on interest rates coming down more quickly than previously thought.

“While mortgage interest rates are still painfully high compared to what they were for more than a decade following the financial crisis, they have already come down from this year’s peak and two more major lenders have today announced rate cuts as a price war gets underway.


“This should get the market flowing more freely. The biggest casualty of the market correction has been the number of homes being sold – transactions in September were 17% down on the same month last year – and the softening in interest rates should bring more potential buyers out of the woodwork to see what they can afford in this post-correction market.

“With inflation cooling sharply, people’s disposable income is rising again – and this will gently nudge up demand in coming months, even if every buyer will continue to factor price risk and higher borrowing costs into what they’re prepared to pay.”

Tony Hall, Head of Business Development, Saffron for Intermediaries points how why the role of advisers continues to be paramount as he comments:  


“House prices are continuing to adjust in light of a challenging economic environment and higher interest rates, but the latest decision by the Bank of England to hold the base rate at 5.25% will bring stability to the market. As confidence starts to return to the sector, we are likely to see an uptick in demand and the value of housing stock bounce back.” 

“In what is still a challenging period for many mortgage holders, it is essential that advisers are on hand to assist borrowers. This latest correction in house prices will still come as a concern to homeowners looking to sell or remortgage, and many will be looking to their adviser for reassurance and support with finding the best possible deal. At Saffron for Intermediaries, we’re playing our part by reducing rates across our product range. As we see these changes come into effect, advisers will be even better positioned to help ease their clients’ remortgaging concerns.” 

Richard Harrison, Head of Mortgages, Atom bank comments:


“The latest house price data from ONS reflects the anecdotal evidence we are receiving from brokers. The last year has obviously been very challenging for the property market but, with the Bank of England now holding Base Rate for two consecutive months, this morning’s inflation news and the continued improvement in mortgage deals on offer, we should see buyer confidence slowly improve.

“Rightmove recently said that vendors are now pricing more realistically and, while sales agreed are still lower than more normal pre-pandemic levels, the gap is closing. Sentiment is everything in the property market, so slightly lower mortgage rates and house prices combined with stronger pay increases will improve affordability for customers, allowing for a more positive view of the market for the year ahead.

“While some uncertainty still remains, the most important thing for brokers and homebuyers is to work with a lender that can offer certainty and, with this, comes greater confidence.”


Nicky Stevenson, Managing Director at national estate agent group Fine & Country, said:

She said: “House prices were broadly stable in September as the housing market remained resilient, supported by committed movers and realistic pricing. 


“The pause on interest rate hikes, falling inflation and stable employment figures have combined to create a calmer property market in the final months of the year. 

“The latest fall in inflation announced today will further boost hopes that interest rates could soon start to drop and entice more buyers to the market.

“Sellers still need to price sensibly as purchasers remain cautious about overpaying, but good quality homes in sought-after locations continue to attract strong interest.

“Attention is already turning to next week’s Autumn Statement. High interest rates have hit first-time buyers particularly hard. And any schemes which could support that segment of the market would be welcomed, especially by second-steppers who want to move from flats to larger homes.”

Nathan Emerson CEO Propertymark comments.

“Across the UK, we are starting to see certain geographical regions demonstrating a small uplift regarding house prices, based on month-by-month analysis. However, it remains very early days yet before we can confidently say we are witnessing sustained growth once again.

“Overall, we are continuing to see an uncertain housing market on the back of elevated inflation and interest rates. Currently many people are still approaching the market with caution, and this will likely remain the case until there is a higher level of consistency with personal finances. As inflation starts to come back towards more manageable levels, Propertymark remain optimistic we will start to see a smoother path ahead. However, we currently have the situation of consumers being extremely mindful regarding affordability and such people will likely only commit to the housing market once they feel assured of a long-term stability – mainly in the form of lower interest rates.”

Conor Murphy, CEO and Founder, Smartr365 and Capricorn Financial Consultancy comments:

“Although the average price tag of a UK home is marginally below where it was a year ago, prices in different regions continue to vary massively – seventy areas are even bucking the overall trend with an annual increase, according to Halifax. While London valuations continue to hold strong it’s not all capital-centric, with East Lindsey in the East Midlands recording growth of 13.3%, and Powys in Wales steaming ahead with +17.4%.

“The decision to hold the base rate at 5.25% earlier this month will also instil confidence in the market and help to solidify prices. We’ve already seen gilt yields react well to the decision and positively influence the swaps market, encouraging mortgage lenders to compete on pricing. And with the news this morning that inflation has cooled to 4.6%, there is good reason to suggest that we might see further product rate cuts as we move into the final stretch of the year. However, with fluctuating house prices and interest rates, tech tools are absolutely vital in helping brokers to react quickly. Embracing digitisation will pay dividends both now and in the long-term by streamlining operations in an extremely fast-moving market.”

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