Analysis of movement in house price indices

Each month, Halifax, Nationwide and the Office for National Statistics (ONS) publish house price indices, tracking the movement in average house prices in the UK. Halifax and Nationwide updates are based on mortgage approvals data, while ONS figures are based on sales data from HM Land Registry, Registers of Scotland, and Property Services Northern Ireland. 

Average house prices down on the year 

House prices in the UK dropped again in October when compared to October 2022, the latest data from Halifax and Nationwide’s house price indices show. 

According to Halifax, prices were down an average 3.2% on the year, while Nationwide’s index showed a 3.3% decrease. This compared to 4.5% and 5.3% annual decreases, respectively, in September 2023. 

On the month, both indexes showed positive movement from September to October, with 1.1% (Halifax) and 0.9% (Nationwide) increases. 

The ONS HPI, which published its latest data for September 2023, showed a 0.1% drop in house prices, the first annual fall since April 2012. As the ONS figures cover house sales that may have been agreed months previously, there tends to be a lag in the data. 

^{Source: Halifax (Methodology), Nationwide (Methodology), ONS (Methodology)} 

On a regional basis, Nationwide, based on the percentage change of a four-quarter moving average, reported decreases across the board, from -1.8% in Northern Ireland to -6.3% in the South West. 

^{Source: Nationwide} 

Dr David Crosthwaite, Chief Economist at BCIS: ‘Against a backdrop of the Bank of England base rate remaining at 5.25%, keeping borrowing costs high and demand tempered, housebuilders will no doubt continue to navigate the market uncertainty using measures like incentivising sales where they can and being very selective when it comes to land purchases. 

‘The latest ONS output data shows new private housing work was down 2.8% in the third quarter of 2023, compared to the second quarter, and 13.4% down on the third quarter of 2022. 

‘In new orders data, based on submitted planning applications, new private housing was up 0.9% in 3Q2023 compared to 2Q2023, but down 11.3% on 3Q2022. We expect the sector to face a very challenging year ahead, before returning to output growth in 2025.’