Growth has also slowed annually from 9.3% in December to 6.3% in January, putting average prices at £289,819.
It is the third consecutive month that average house price growth has slowed annually, according to Land Registry data.
Average prices fell in most UK regions on a monthly basis, with the largest falls in the North West and Yorkshire and Humber at 2.4% and 2.5% respectively.
Annual house price inflation was highest in the North East though, where prices increased by 10.0% in the 12 months to January 2023.
The lowest annual inflation was in Scotland, where prices increased by 1.%.
London was the English region with the lowest annual growth, with prices up 3.2% annually in January the 12 months to January 2023.
Commeting on the data, Karen Noye, mortgage expert at Quilter, said: “The ongoing cost of living crisis and increased energy bills have had a significant impact on the housing market, as did the fallout of the ill-fated mini Budget, but the market has so far been more buoyant than predicted. While we have seen a dip in prices in recent months, the dramatic fall that had been rumoured is yet to materialise and the slightly more stable mortgage market could see it held off for the time being.
“However, the current economic circumstances mean we are unable to rule out further turbulence in the housing market.”She highlighted UK inflation data unexpectedly rising yesterday to 10.4%, adding: “This leaves the Bank of England in a difficult position as it may not yet be able to press pause on rate hikes, though positively for house buyers fixed-rate mortgages are likely to continue on their downward trend even if the Bank does opt to raise rates further.
“What’s more, in February 2023 UK residential property transactions saw a significant drop of 18% compared to the same month last year and a further decline of 4% from the previous month. For now, the lack of transactions in the market will have a material impact on house prices, pushing them downwards as sellers compete for buyers – reversing how the market has operated over the last few years.”
Estate agents remain bullish despite the price drops.
Emily Williams, director of residential research at Savills, said: “Some markets continue to outperform. The North East saw a slight increase in average values between December 2022 and January 2023, reflecting the region’s limited exposure to mortgage affordability pressures. Savills expects regions furthest from London, and cash and equity rich markets which are least reliant on borrowing to be the strongest performers over the next five years.
“The data is also starting to show the challenges first-time buyers are facing due to rising borrowing costs. The average price paid by first-time buyers fell by 1.5% between December and January, but values paid by home movers, who have been able to build up equity through the strong price growth in 2020-2022 and can therefore borrow at lower loan to income ratios, saw a much smaller fall.”
Nick Leeming, chairman of Jackson-Stops, said: “Much of this data reflects the fallout from Autumn’s Trussonomics, where now, as we move into the spring, we are seeing a much more healthy market with more listings as well as buyers, as people renew their search after putting purchases on hold for longer than usual at the end of last year. Resilience is the new buzz word for housing, with what could be a surprisingly bright summer ahead.
“Sellers have benefited from unprecedented levels of house price growth in recent years and even as this pace softens, low housing stock and stabilising mortgage rates are likely to insulate prices for the foreseeable future.”
Nathan Emerson, chief executive of Propertymark, added: “Estate agents have seen an increase in homes coming onto the market which has bought buyers out of the woodwork and increased the number of potential buyers registering in branch.
“Most properties are sticking on the market for longer, feeling similar to 2019 and interestingly, the viewing to sale ratio has increased meaning on average, less viewings are needed per home in order to sell.”
There is no way of knowing where the respondents are from and if any have recently used an agent, which may sway whether or not they have heard of Propertymark.
Lamdin said he posted the survey in response to property TV presenter Phil Spencer’s recent MoveIQ housing market update, which is developed in partnership with Propertymark.
The update highlighted Propertymark data claiming more homes are coming up for sale and that prices are still above pre-pandemic levels.
Lamdin queried if Spencer is risking his audience trust “by promoting the Propertymark narrative at the same time as giving unhelpful views that are not only inaccurate but not his area of expertise.”
He told Estate Agent Today: “Spencer is the undisputed expert of properties themselves, no question. But he’s no expert on the wider market.
“There is no issue with anyone being sponsored, but when movers trust someone to be impartial, and not only are they not impartial, but they’re used as a trusted mouthpiece to push a very partisan narrative, it’s compounding the public’s mistrust of the whole industry.”
Lamdin described Propertymark as an excellent training organisation but suggested it is a “tired and outdated organisation” from the point of view of representing the industry to the public.
He added: “Other than for training, what have they delivered that helped any agent ever?
“People will never trust the industry as a whole while the mouthpiece is pumping out vested interest guff.”
Responding to the comments, Spencer said: “It’s important to us at Move iQ that we provide home movers with as representative view of the housing market as possible, so people can form their own opinions.
“This is why since our inception, we have, and will continue to, talk to as wide a range of industry experts as possible as can be seen on our housing market update and people in property YouTube playlists, with more to come throughout the year.
“We also make no apology for endorsing Propertymark member agents who take qualifications, regulation and CPD seriously.
“This is of huge benefit to the consumer in a still largely un-regulated industry. We believe it is in the best interests for consumers to work with a professional who is willing to go above current minimum professional standards.
“MoveIQ shares the hope that amplifying public awareness of Propertymark agents reaches a point where public awareness is so strong that not using a member firm feels as risky for example as booking a holiday without using an ABTA/ATOL registered travel agent.”
Nathan Emerson, chief executive of Propertymark, added:“Propertymark is a professional membership body and our priorities over the last few years especially have been working predominantly with the UK Government to amplify our members voices and needs when important decisions have been made in what has been an uncertain market.
“We are constantly evolving our delivery to the needs of members and we currently have a huge drive underway to ensure that members are represented in consumer spaces.
“Last year we increased investment into our PR team and as a result our presence in consumer media rose by 178%.
“Many of these opportunities go to agents on the ground within our membership. Since July we have been progressing on an even larger consumer awareness campaign.”
More than 1.2m consumers have downloaded Propertymark and MoveIQ guidance and market updates since July 2022.
Propertymark was named in national, regional and broadcast consumer media 2,245 times, an average of six per day, the trade body said.
Annual house price growth has fallen for the first time since June 2020 and is now at its weakest level since November 2012, according to Nationwide.
It comes as Bank of England data also showed a drop in mortgage approvals between December and January, in a day full of warning signs about the health of the property market.
The latest Nationwide House Price Index showed annual house price growth was down 1.1% last month and fell 0.5% on a monthly basis to £257,40.
Robert Gardner, Nationwide’s chief economist, said: “The recent run of weak house price data began with the financial market turbulence in response to the mini-Budget at the end of September last year.
“While financial market conditions normalised some time ago, housing market activity has remained subdued.
“This likely reflects the lingering impact on confidence as well as the cumulative impact of the financial pressures that have been weighing on households for some time.
“Indeed, inflation has continued to outpace wage growth and mortgage rates remain significantly higher than the lows recorded in 2021.
“Even though consumer sentiment has improved in recent months, it is still languishing at levels prevailing during the depths of the financial crisis.”
He said it will be hard for the market to regain much momentum in the near term, adding: “Despite the modest fall in house prices, for a prospective first-time buyer earning the average income looking to buy the typical home, mortgage payments remain well above the long run average as a share of take-home pay.
“In addition, deposit requirements remain prohibitively high for many and saving for a deposit remains a struggle given the rising cost of living, especially for those in the private rented sector, where rents have been rising strongly.”
Gardner suggested conditions should gradually improve if inflation moderates in the coming months as expected, easing pressure on household budgets. Solid gains in nominal incomes together with weak or declining house prices will also support housing affordability, especially if mortgage rates edge lower in the coming months.”
Meanwhile, Bank of England mortgage data yesterday showed approvals fell from 40,540 in December to 39,637 in January.
This figures was also down on the 73,789 seen in January of last year.
Agents remained positive despite the negative data.
Tom Bill, head of UK residential research at Knight Frank, said: “While most of the economy has moved on from the mini-Budget, the hangover is longer for the UK housing market. It has led to a mismatch between the most recent anecdotal evidence and the latest data.
“While last month saw the steepest annual house price decline in more than ten years, activity has been solid so far this year as buyers and sellers adapt to higher mortgage rates. We expect transaction levels to fall from the heights of the pandemic and prices to decline by 5% this year but the UK housing market is far from being on its knees.”
Nathan Emerson, chief executive of agency trade body Propertymark, added: “Despite house prices falling, values are still higher than pre-pandemic.
“Because of this, our member agents recently reported an 80% increase in new sellers entering the market, showing that despite not pulling in as much money from a sale than they would have done last year, sellers still have a healthy appetite to get moving.
“Previously, sellers were able to be more ambitious about the price, but buyers are most certainly now in the driver’s seat and are negotiating hard when hunting for their ideal home.”
Chartered psychologist, neuroscientist and award-winning science communicator Dr Sabina Brennan has been announced as the latest speaker at this year’s Propertymark One event.
She will be showing agents how to harness their brain power to reach their true potential.
Dr Brennan has been engaged as an advisor to governments and global businesses influencing policy and practice in the areas of brain health, ageing, dementia, migraine, and multiple sclerosis.
She also volunteers on scientific advisory boards and advocacy panels supporting charities, non-profits, and NGOs.
Jason Lee, Propertymark’s commercial relationships and events manager, said: “We aren’t holding back on the quality of speakers at this year’s Propertymark One event. In line with its tagline, everyone will be learning new skills to really raise their game.
“We are providing a high calibre line up and will continue to announce the diverse range of experts that we have secured on the run up to the eagerly awaited event.”
Taglined ‘Raise Your Game’, Propertymark, will be bringing sales, lettings, auctioneers, Inventories, and commercial property talent to Wembley Arena for the special conference on 27 June.
Broadcast personality and presenter Jenni Falconer was last week named as host of the event.
Annual house price growth slowed in December and ended the year negative on a monthly basis, the latest Land Registry figures show.
The latest Land Registry House Price Index, assessing property market activity in December 2022, show annual growth slowed to 9.8% from 10.6% a month before.
Prices dropped by 0.4% on a monthly basis, putting the average UK house price at the end of 2022 at £294,329.
House price annual growth was strongest in the East Midlands where prices increased by 12.3% in the 12 months to December 2022.
The lowest annual growth was in Scotland, where prices increased by 5.7% in the 12 months to December 2022.
London was the English region with the lowest annual growth, where prices increased by 6.7% annually.
The monthly regional picture was less impressive though with prices dropping in four out of nine English regions.
House prices fell by 1.8% on a monthly basis in the South Werst, by 0.8% in the East, 0.5% in the North East and 0.1% in the North West.
Prices were flat on a monthly basis in London and the West Midlands.
Commenting on the data, Frances McDonald, research analyst at Savills, said: “This sits against the backdrop of a significant fall in mortgage approvals in December and highlights the turbulence in the mortgage markets at the end of 2022, following September’s mini-Budget.
“Our expectation is that this will represent a low point for transactions and since then we have seen stabilisation in the mortgage markets and, in particular, a fall in the cost of fixed rate mortgages. For someone borrowing a 75% mortgage, the average quoted two-year fixed mortgage rate was 5.17% in January 2023, down from 6% in October 2022, despite a tenth successive base rate increase in February.
“The fall in the cost of fixed-rate mortgage debt is likely a reflection of lenders trying to capture a greater share of a smaller mortgage market, but there is also an increasing expectation that inflation has peaked and that Bank base rate is likely to start coming down in 2024.
“But borrowers still face a considerable increase in their mortgage costs, whether new entrants to the market or those coming off of a fixed rate deal, which means we likely haven’t seen the end of house price falls. We do expect them to continue to be more modest in the less mortgage-dependent prime markets.”
Nathan Emerson, chief executive of agency trade body Propertymark, added: “As we moved into 2023, buyers and sellers were, and still are, well placed to take advantage of the ongoing positive shift in a more sensible market.
“Throughout 2022, our member agents saw a steady flow of new instructions with the usual traditional dips noted in December including a small drop in the total number of properties available for sale.
“Buyers are entering a less competitive market with competition dropping by over a third, which works well in their favour, but for sellers, house prices are still higher than this time last year, meaning they will see a comfortable gain when looking to move.”
An estate agency veteran has urged Government ministers to consider where their own children will live amid a continuing shortage of property on the market.
Simon Gerrard, managing director of Martyn Gerrard estate agents and past-president of the National Association of Estate Agents, has suggested buyers are still waiting for the dust to settle after September’s mini-Budget but argues the real issue the sector faces is a lack of supply.
It comes after Zoopla’s latest House Price Index shows house price growth has slowed and demand is rising but remains below the five-year average.
Gerrard said: “The reported fall in house prices at the back end of last year confirms we’re still feeling the ripples of September’s mini-Budget and the wider economic pressures. I don’t think demand has necessarily disappeared, as we have had a busier than expected return after Christmas.
“However, some people are choosing to remain patient, hold steady, and wait to see if there are any further changes to interest rates or whether the wider economy improves in the near future. “However, this dip in demand that is likely behind the price drop should only be temporary, and I am hopeful for a return to growth.”
He suggested there are still people looking to buy in more affluent areas of the country but said the real issue is the lack of supply in the market, which Gerrard said has probably prevented an even sharper fall in prices than the moderate drop being reported.
Gerrard added: “There simply aren’t enough properties coming onto the market, nor is new stock being built at the rate we need.
“The question every politician should be asking is where are my children going to live?
“I think this Government has given up on housing for young people. Moreover, those that can’t afford to buy are also now having affordability problems with renting, as the Government has killed the buy to let market. The Government needs to realise that increasing the tax burden on landlords has ultimately hit the pockets of tenants too.
“The issues around supply are far from being resolved as the Government continues to avoid confronting the ‘NIMBYs’ who oppose badly needed housing developments near them, and local councils continue resist developers’ attempts to expand existing stock.
“Authorities and those opposing new development seem to be wilfully ignoring a very real and growing problem – we have a growing population, a shortage of housing stock, and a widening gap between the two. The country, and the housing market, needs strong leadership and this starts with enacting the planning reform urgently required.”
Agency trade body Propertymark has also commented on the Zoopla report, its chief executive Nathan Emerson said: “Estate agents have noted a booming January with a rise in homes coming to the market and plenty of keen sellers present.
“Buyers are learning quickly that the power of the purchase is now in their hands due to competition levels easing for the first time in a while, but their purse strings are being tightened and some are now looking for slightly smaller, more cost effective homes than before.”
The U-turn by politicians in Scotland who ended a complete rent freeze doesn’t go far enough, says Propertymark.
At the end of last week Scottish Government housing minister Patrick Harvie revealed the U-turn, claiming he had listened to the concerns of landlords and letting agents in Scotland.
In general, from April, the current rent freeze will end and private rents can rise by up to 3.0 per cent over a 12 month period.
Landlords can also apply to Rent Service Scotland to increase rent to partially cover specific costs including increased mortgage interest payments on the property they are letting, an increase in landlords’ insurance or increases in service charges paid as part of a tenancy, subject to an overall limit. From April it will be 6.0 per cent.
However the lettings agents body Propertymark says this is not enough.
A statement over the weekend says: “Propertymark has been engaged fully in the development and implementation of the Cost of Living Act, representing our members’ views every step of the way.
“Whilst rent cap legislation continues to create uncertainty, agents and landlords will welcome a rise to three per cent, but this is clearly not enough.
“The bigger concern is also the SNP and Scottish Green’s desire to push on with permanent rent controls with a new Housing Bill to be produced this year. It is vital that we ensure that the residential property sector in Scotland is investible and that is what Propertymark will continue to campaign for.”
Under the new Scottish rules from April evictions will still be banned except in the limited circumstances set out in legislation and the rent cap for student accommodation will be suspended “recognising its limited impact on annual rents set on the basis of an academic year”.
Hundreds of agents have already registered to attend the landmark Propertymark One conference at Wembley Arena on 27 June.
Agency trade body Propertymark said 700 delegates have already registered for the event, before tickets have become available for purchase.
In addition to this, 26% of supplier stalls have already been sold.
The event, the first of its kind in Propertymark history is described as the biggest agency conference of the year, bringing sales, lettings auctioneers, inventories and commercial property talent together in one exhibition.
It will help agents learn about and industry relevant legislative change and will also include stalls from industry suppliers.
Previously, Propertymark has held separate, national events, pulling in more than 1,200 agents, and is hoping to attracting 1,500 this year by mixing agents together in one exciting experience.
Jason Lee, commercial relationships and events manager for Propertymark, said: “This is the biggest event we have ever held as an organisation, and we look forward to welcoming agents of all disciplines and bringing everyone together,” he said.
“This event is so important for all agents to attend as it will discuss anything and everything you need to know about in the property sphere.
“We already have close to 50% of our predicted 1500 delegates registered, before speakers have even been announced, which is amazing.”
Early bird tickets are on sale now and cost £135 for Propertymark members and £165 for non-members.
The sale ends on 28 February, where prices will change to £180 for Propertymark members and £200 for non-members.
The registration page for Propertymark One is now live on the Propertymark website for bookings.
A quarter have seen a consistent level of buyer interest, with just 18% stating they are now busier.
Half of estate agents also stated that they are currently sitting on a lower level of for sale stock versus the start of 2022, with 45% seeing a dip in the number of new enquiries from those looking to sell a home.
For those who are seeing buyers act with intent, half stated that they were doing so with offers below asking price, with just 11% seeing buyers offer above asking pric.
Perhaps more worringly, 44% of estate agents have seen an increased number of transactions falling through for reasons such as a buyer seeing their mortgage offer amended during the transaction process and 52% have seen an uptick in the number of homes being down valued by surveyors.
Mal McCallion, chief operating officer for GetAgent, said: “It certainly presents a challenge for the nation’s estate agents who will have to prove they are the very best in their respective market in order to entice sellers onto the books.
“Of course, these are all comparisons with what has been an incredible couple of years for the industry. As ever, transactions continue to occur at the right price across all localities.”
It comes as estate agency trade body Propertymark released its annual review and outlook on the UK housing market, uncovering that 71% of estate agents believe sellers are being unrealistic in terms of achievable pricing for their properties.
Agents believe sellers are overvaluing their properties, thinking they have the best house on the street or can sell at a price which will enable their next move, not what their property is actually worth.
Its members are encouraging their sellers to think twice about if they are being realistic when listing their property for sale.
Propertymark registered agent Liana Loporto-Browne said a four-bed terraced house in Greater London was with several other agents before it landed with her.
The original asking price of the property was £1.15m and had already been on the market for several months before it was reduced to £950,000 by Liana Loporto Property, selling in the same months for £925,000.
The property market in the UK’s expensive major cities can be less attractive when buyer’s budgets are constrained but quieter and more affordable areas such as the North West are holding their value, Propertymark said.
Its research found viewings per property among members had fallen 71% per cent from April to December 2022. This decline shows the cooling off in buyer demand, causing a direct effect on prices achieved.
Nathan Emerson, chief executive of Propertymark, said: “The largest shift we have seen in the sales market is prices agreed, compared to normal asking prices. 2022, started as a seller’s market, and ended the year back to normality as a buyer’s market.
“The best price is usually achieved in the first four to six weeks of marketing, so we urge sellers not to compare their property to other homes on the market which may not have sold yet, and ensure they receive valuations from a qualified and accredited estate agent.”
Agency trade body Propertymark has secured Wembley Stadium for a new event that is bringing together sales, lettings, auctioneers, inventories, and commercial property talent.
The venue may be better known for football or concerts, but agents will gather near the hallowed turf on 27 June for an event called Propertymark One.
It comes as Propertymark staff mysteriously changed their logo on their social media profiles this week, replacing it with golden interlinked houses to tease the announcement.
Around 1,500 people are expected to attend, making it the largest agent conference in the UK.
Taglined ‘Raise Your Game’, Propertymark is keeping tight lipped about the format and the speakers that will take to the Wembley stage but have stated every type of agent will be catered for across all disciplines with multiple speakers across multiple rooms as well as an exceptional exhibition.
Nathan Emerson, chief executive of Propertymark, said: “June’s event is going to be mammoth. Our conferences have grown substantially, and as the only body uniquely representing all agency disciplines, we are chomping at the bit to bring them together in one massive event like this.
“Those who join Propertymark are undivided in their desire to do an exceptional job. Our diverse stream of membership celebrates distinctive practices and it’s incredibly exciting to bring all agents who have a drive to be the best version of themselves and a hunger to succeed together, under one roof.”
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