House prices plummet by average of more than £11,000 in two months

House prices plummet by average of more than £11,000 in two months

House prices plummet by an average of more than £11,000 in just two months at the end of 2022 in the largest drop seen since 2009

  • House prices saw biggest drop since 2009 between October and December
  • Typical home went from £292,406 to £281,272, with an average fall of £11,134 
  • Experts said if house prices fell by 10 per cent would still be higher than 2019 

House prices fell by an average £11,134 in just two months in 2022 – in the biggest drop in more than a decade.

It means the typical home was worth £281,272 in December, down from £292,406 in October.

In the past three months, values are down 2.5 per cent, the largest quarterly drop since February 2009 during the financial crash.

House prices peaked in August 2022, with the average home increasing by £17,000, according to Halifax.

Home loan rates have since fallen back, with the average two and five-year fixed-rate deals now below 6 per cent, according to analyst Moneyfacts

In the past three months, house values are down 2.5 per cent, the largest quarterly drop since February 2009, during the financial crash

But the mini-Budget spooked the market after causing mortgage rates to rocket. 

Home loan rates have since fallen back, with the average two and five-year fixed-rate deals now below 6 per cent, according to analyst Moneyfacts. 

A year ago the average two-year fix was just 2.38 per cent.

Halifax said the annual rate of house price inflation also fell, from 4.6 per cent in November to 2 per cent last month. It forecasts prices will fall 8 per cent in the next 12 months.

Dominik Lipnicki, of Your Mortgage Decisions, said: ‘Even if house prices fell 10 per cent they would still be above pre-pandemic levels.’

‘This is not sudden or unexpected and homeowners should not be worried.’

The rate of annual price growth slowed in every region.

Prices rose by 6.5 per cent in the north east compared to 10.5 per cent the month before and properties there are now worth an average of £169,980.

Kim Kinnaird, director of Halifax mortgages, said: ‘Uncertainties about the extent to which cost of living increases will impact household bills, alongside rising interest rates, is leading to an overall slowing of the market.

‘As we enter 2023, the housing market will continue to be impacted by the wider economic environment.’

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