The Summer of 2023 has joined the same status as the post summer season before the 2008 economic crash. According to the recent report from Rightmove, the 0.5% post summer increase of homes on the market is the smallest in 15 years. The average new asking price in the month to October 7 was £368,231. The annual average asking price to October 7 declined by 0.8%, which is seen as a direct result of the higher interest rates offered by lenders.

According to a new analysis of the recent report on house prices from Nationwide, estate agency Savills has shown house prices were in much greater decline if taking into account inflation. The report reveals housing wealth in many regions of the UK are no better than they were prior to the 2008 financial crisis. The decline of 2.8% in nominal terms since the record high in March 2022 is in contrast with the 13.4% decline when considering real terms.

Homeowners and hopeful home buyers hoping for the high interest rates to take a downward turn as quickly as they rose will be disheartened by the latest report from the International Monetary Fund (IMF). The influential global group reporting on the state of the global economic conditions revealed their forecast for the UK is for higher interest rates to last for five years in the fight against inflation. It should be noted that the report was compiled before the recent revisions to UK growth by the Treasury or the recent declaration of war in Israel.

The housing market has shifted to a buyer’s market. It happened quite quickly if one considers the main reason is due to higher interest rates that were historically low less than two years ago. The Bank of England’s Monetary Policy Committee began the first of the recent series of increases to the standard base interest rate in December 2021. The rate then was at almost zero at 0.1% and was increased to 0.25%, For fourteen consecutive meetings the rate increased to 5.25% until last month, when during the September MPC meeting the majority vote was to hold the rate steady. In less than two years, the housing market went from a boom of record-breaking house prices month into month to the quickest decline in UK house prices in 14 years.

Homeowners should be alert as to the latest reports surrounding the data released by Halifax on the housing market. Most experts are commenting the data points to a strained market throughout next year. This could put pressure on those homeowners with little equity built into their property, this would be fairly new homeowners or those that have cashed out their equity feeling confident in the housing market months and a few years past. The Halifax report revealed that the September annual average house price declined by 4.7%, followed by the August report that experienced a 4.5% fall. 

The house prices reported by Nationwide have declined in every region of the UK. The average house price in September 2023 is 5.3% less than the same month last year. The house price index in August revealed a 0.8% fall. At almost £14,500 less, the average house price reported by Nationwide is £257,808. The average house price decline could be a strong indicator that the housing market might not have faired well had another hike been applied to the standard base interest rate by the Bank of England’s Monetary Policy Committee (MPC).