The areas that saw the biggest house price falls in 2023

There was a clear North-South divide with shifting house prices during 2023, according to new market analysis from Bird & Co.

Related topics:  Property,  House Prices
Property | Reporter
20th March 2024
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"The areas seeing the greatest decline in house prices across 2023 were predominantly in the South East, which could potentially come as a shock"
- Daniel Chard - Bird & Co

The 2023 house price figures across the entire UK are finally in, unveiling the most dynamic property market shifts, by location, over the last year.

Researchers at Bird & Co have explored this recently released data to present a detailed overview of the housing market trends throughout 2023. The study not only highlights areas with significant house price changes, but also delves into broader economic impacts for homeowners and potential buyers.

The analysis of Land Registry data from January to December 2023 shows a surprising turn of events, as areas in the South East top the charts for the greatest decrease in house prices across the year. Comparatively, areas up North saw some of the highest increases.

Notably, the regions experiencing the most substantial surge in house prices exhibit notable diversity across England, Wales, and Scotland, highlighting a myriad of influences shaping the outcomes.

House prices dropped hardest in the most expensive boroughs, including City of Westminster, Kensington and Chelsea, and Hammersmith and Fulham.

In City of Westminster, the price of a detached house dropped from 3.5 million to 2.5 million. All types of property saw a decrease in this area.

Intriguingly, Winchester, situated within a 2-hour commute of London, has demonstrated one of the most significant spikes in house prices. In contrast, areas such as Tunbridge Wells have seen a notable decrease of over 9%.

In addition to the regions experiencing notable fluctuations in house prices, three areas emerged as exemplifying remarkable stability, with a minimal -0.01% variance in house prices. Doncaster, Tewkesbury, and Walsall stood out as instances of considerable steadiness in the housing market.

Whilst stability is ultimately better than a property price drop, it can affect the ability to refinance a mortgage. Homeowners often use equity growth to qualify for favourable refinancing terms. If home values remain stagnant, it may limit refinancing options.

Daniel Chard, Partner at Bird & Co, says: “When house prices rise, homeowners can leverage increased equity for various financial opportunities, like re-mortgaging or home equity loans. Conversely, during declines, homeowners may face challenges affecting net worth and financial flexibility.

“The areas seeing the greatest decline in house prices across 2023 were predominantly in the South East, which could potentially come as a shock. However, when we consider the increase in house prices in this region in 2022, as the market levels out a decrease could be an expected after-effect. Even so, it is surprising to see such affluent areas at the top of the list, in comparison to areas up North which top the charts for the biggest increase.

“For aspiring homeowners, the housing market's status dictates affordability and accessibility. Rising prices pose challenges, demanding higher down payments and limiting options. On the other hand, stability or decreases create a more favourable environment for those entering the market.

“The ebb and flow of house prices significantly impacts overall property market stability, influencing economic health. Sudden changes trigger cascading effects, shaping lending practices, construction trends, and consumer confidence. Staying informed is crucial for informed decisions in the dynamic housing market.”

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