Housepresso 8 Jan 23
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House prices fall in December but rose in 2022
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The Halifax House Price Index followed the Nationwide House Price Index reporting the fourth consecutive monthly fall in house prices in December 2022.
The average UK house price is now £281,772, some £12,720 lower than their August 2022 peak of £293,992. The December fall takes house prices back to their levels in February and March last year. House prices today are around £41,000 higher than they were before the start of the COVID-19 pandemic.
Mortgage rates more than double in a year
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The latest data from the Bank of England revealed that overall average mortgage rates for new business increased again in November 2022, rising by more than 8%, but have more than doubled over the last year
Mortgage approvals plummet
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Mortgage approvals for November 2022 were 46,075. This was 20.4% lower than the 57,875 mortgages approved in October 2022. This was 33.2% lower than the 68,969 mortgages approved during November 2021.
Housing Market forecasts for 2023
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In 2023, we forecast that UK house prices will fall by 8-10%; housing transactions to fall by more than 20% to around 960,000; Bank Rate to continue to increase to a peak of 5.25% in September 2023 before starting to fall.
In 2022 the UK housing market played a game of two unequal halves, which were defined by the September mini-budget, rising before it and falling after it. We expect 2023 to be a challenging year, but with housing market conditions improving in the second half and possibly gaining momentum from September onwards.
Twindig Housing Market Index
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The Twindig Housing Market Index has had a positive start to the year rising by 4.9% this week to 70.6 its highest level since 17 September 2022. Investors were most optimistic about the UK Housebuilders, a pattern we often see at the start of the year. Statistically, it is a brave person who bets on the share prices of housebuilders falling in the first quarter of any given year.