Annual house price growth in the UK slowed to 4.7% in November, falling sharply from 8.2% in October, according to the latest Halifax House Price Index.

The average house price fell on a month-by-month basis by 2.3% in November, to follow a 0.4% dip in October. This monthly drop is the largest Halifax has recorded since October 2008 as well as the third consecutive fall.

Halifax’s data revealed that the average house price in the UK is now sitting at £285,579, a figure down from £292,406 last month.

Director, Halifax Mortgages, Kim Kinnaird, said that while a market slowdown was expected given the known economic headwinds, and following such extensive house price inflation over the last few years, this month’s fall reflects “the worst of the market volatility over recent months”.

“Some potential home moves have been paused as homebuyers feel increased pressure on affordability and industry data continues to suggest that many buyers and sellers are taking stock while the market continues to stabilise,” Kinnaird commented.

“When thinking about the future for house prices, it is important to remember the context of the last few years, when we witnessed some of the biggest house price increases the market has ever seen.”

Halifax’s data shows that property prices are up more than £12,000 compared to this time last year, and are also well above their pre-pandemic levels – having increased £46,403 since March 2020.

“The market may now be going through a process of normalisation,” Kinnaird added. “While some important factors like the limited supply of properties for sale will remain, the trajectory of mortgage rates, the robustness of household finances in the face of the rising cost of living, and how the economy – and more specifically the labour market – performs will be key in determining house prices changes in 2023.”

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