The average UK property price is now £46,403 higher than it was at the onset of the COVID pandemic, new analysis from Halifax has shown.

This equates to an increase of 19.4% in that period, with the average house price rising from £239,176 in March 2020 to £285,579 in November this year.

Halifax’s data shows that annual house price growth was 4.7% in the year to November, having peaked 12.5% in June this year, which was the strongest rate of annual growth since January 2005. A new record high average property price was set in August this year, of £293,992.

Halifax’s latest UK Housing Market Review revealed that the typical UK house price has increased by 71% over the last decade, climbing rapidly from £166,627 in November 2012, a rise of £118,953 in 10 years.

The latest data also revealed that properties sold to first-time buyers recorded a lower rate of annual house price inflation (+3.6%) than home movers (+5.3%) over the last year to the end of November.

Homes director at Halifax, Andrew Asaam, said that UK housing market in 2022 was “a tale of two halves”.

“Following such rapid house price growth, and the growing economic headwinds, a slowdown was almost inevitable,” Asaam said. “We saw this play out with a flattening of house prices over the summer, before the -2.3% decrease recorded in November.

“It’s important to remember we saw some of the biggest house price increases the market has ever seen over the last few years. Between March 2020 and August 2022, the average house price increased by nearly £55,000 (23%) to £293,992, a new record high.

“As the increasing cost of living puts more pressure on household finances and rising interest rates impact customers’ monthly mortgage payments, there’s understandably now more caution among both buyers and sellers – particularly following recent market volatility – which has seen demand soften as people take stock.”

Looking ahead to next year, Assam suggested 2023 will be a “more challenging economic environment”, and that the housing market will continue to rebalance to reflect these new norms.

Though the limited supply of properties for sale will continue to support prices, he highlighted that the pandemic-driven surge in demand has receded, and that the housing market is emerging out of more than a decade of record low interest rates.

Assam added: “Unemployment is expected to rise and reach around 5.5%. This is relatively low by historical standards, but will be challenging for many people. While inflation as a whole may be close to or at its peak, household energy bills are likely to rise again, putting more pressure on household budgets.

“We therefore expect that UK house prices will decrease by around 8% next year. To put this into perspective, such a fall would place the average property price back at roughly the level it was in April 2021, reversing only some of the gains made during the pandemic. There is still uncertainty around this forecast, with the trajectory for base rate, now expected to peak at 4%, and unemployment levels key to determining any future changes.”

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