UK House Price Growth: UK annual house price growth slowed to 4.4% in November 2022, compared with 7.2% in October. Prices also fell by 1.4% month-on-month after seasonal adjustment. This followed a 0.9% monthly fall during October.
The figures suggested that the housing market was losing momentum after mortgage borrowing costs increased.
However, a national index could not show what happened to every property, street or region.
For mortgage borrowers, affordability mattered as much as the property price. A lower purchase price did not always offset higher monthly borrowing costs.
What happened to UK house prices in November 2022?
The Nationwide House Price Index recorded a sharp reduction in annual UK house price growth during November 2022. Annual growth fell from 7.2% in October to 4.4% in November. The seasonally adjusted monthly index also fell by 1.4%. This was the largest monthly reduction recorded by Nationwide since June 2020. The reported average UK property price declined from £268,282 in October to £263,788 in November.
These figures showed two different measurements.
Annual growth compared to November 2021. Monthly growth compared November with October 2022.
Therefore, prices could remain higher than one year earlier while falling during the latest month.
This distinction matters. Annual growth describes the longer comparison, while monthly movement can reveal a recent change in direction.
The underlying figures are available within the Nationwide November 2022 House Price Index.
November 2022 house price figures
| Measure | October 2022 | November 2022 | Change |
|---|---|---|---|
| Annual house price growth | 7.2% | 4.4% | Down 2.8 percentage points |
| Monthly price movement | -0.9% | -1.4% | Faster monthly decline |
| Reported average price | £268,282 | £263,788 | Down £4,494 |
The table does not mean every UK property lost £4,494.
A house price index measures changes across a group of mortgage-backed property transactions. Individual values depend on location, condition and property type.
Why did annual house price growth slow?
The November figures followed a period of financial and political disruption.
The September 2022 mini-Budget contributed to increased volatility in financial markets. Mortgage lenders withdrew or repriced many products as funding expectations changed.
Although financial markets later became more stable, mortgage rates remained higher than they were earlier in 2022.
Higher mortgage rates changed what many households could afford.
A buyer might still earn the same income and hold the same deposit. However, a higher interest rate could increase the monthly cost of the proposed mortgage.
Lenders also had to assess whether repayments remained affordable under their lending rules.
This meant some buyers faced:
- lower maximum borrowing figures;
- higher estimated monthly repayments;
- increased affordability stress testing;
- a need for a larger deposit;
- fewer suitable mortgage choices;
- reduced budgets for property offers.
The housing market did not only face a question of property value. It faced a question of whether borrowing could still support that value.
House prices and mortgage affordability are different
A fall in property prices can appear helpful for buyers. However, the purchase price is only one part of the calculation.
Consider a buyer purchasing with a mortgage.
Their position depends on:
- the property price;
- the deposit available;
- the required loan;
- the mortgage interest rate;
- the repayment term;
- lender affordability rules;
- household income and expenditure;
- credit history.
A cheaper property can still produce a higher monthly payment when the mortgage rate has increased substantially.
For this reason, buyers should examine property prices and mortgage affordability together.
A national decline also does not guarantee that a lender will approve a particular mortgage.
Lenders assess the applicant and the property separately. Both must meet the lender’s criteria.
Garrington Property Finders
Jonathan Hopper, CEO of Garrington Property Finders, commented: “Two months on from the chaotic aftermath of the mini-Budget, buyers and sellers are still locked in a standoff over what constitutes fair value. “So far, all the signs are that sellers are flinching first. Sensing that the balance of power is tilting ever further in their favour, buyers frequently ask for– and get – significant price reductions.
“Asking prices are starting to come down too, as sellers compete for the attention of an increasingly rare and powerful group – proceedable buyers.
“In some areas, sellers’ fears of falling prices have unleashed a surge in supply, as those with a home to sell rush to get it on the market before prices soften further.
“For all the speed of the price correction, this isn’t yet a recessionary market, and there is still activity on the front line as committed and strategic buyers sense a moment of opportunity.
“But while mortgage rates have come down from October’s highs, the coming months will see many would-be buyers have to rethink what they can safely afford.
“If this translates into further downward pressure on prices, the winter will be long and hard for sellers.”
Highcastle Estates
Zaid Patel, director at London-based estate agents Highcastle Estates, added: “We are now in a market where buyers are testing their chances by offering 10%-15% below the asking price. They aim to see which sellers might agree to sell quickly. Both property investors and first-time buyers are making lower offers due to rising mortgage costs.
As the year draws to a close, the property market often experiences a slowdown. Some sellers are now prepared to accept a lower price and move on for a fresh start in 2023. At the same time, many cash buyers have sold assets and are searching for bargains. These cash buyers will support the housing market during this period. If prices drop by 10%-15%, cash buyers are expected to increase. This could help stabilise and settle the market.”
Original Source of Content Credit: Financial Reporter
What did the figures mean for first-time buyers?
The November slowdown created a mixed position for first-time buyers.
Lower asking prices or improved negotiating conditions could help some purchasers. Yet increased mortgage costs could reduce the amount they were able to borrow.
A first-time buyer still needed to consider:
- how much deposit was available;
- the resulting loan-to-value;
- monthly mortgage repayments;
- lender affordability calculations;
- valuation risk;
- legal and survey costs;
- Stamp Duty rules;
- future financial resilience.
A lower agreed price could reduce the required mortgage. However, it was not automatically evidence that the purchase was affordable.
Buyers could review the practical application process within the first-time buyer mortgage guide.
What did the slowdown mean for home movers?
Home movers often depend on two connected transactions.
They may need to sell an existing property before buying another. A slower market can affect both sides.
A lower sale price could reduce the equity available for the next deposit. At the same time, a lower purchase price could reduce the required borrowing.
The final position depends on the difference between those two values.
Home movers also needed to examine:
- whether their existing mortgage was portable;
- any early repayment charges;
- whether additional borrowing was required;
- affordability under current lender rules;
- whether the new property met lending criteria;
- the financial effect of a delayed sale.
Our moving home mortgage guide explains porting, replacing a mortgage and borrowing more.
What did the figures mean for existing homeowners?
The monthly fall did not create an immediate financial loss for every homeowner.
A property value becomes particularly important when an owner sells, remortgages or applies for further borrowing.
Homeowners approaching a new mortgage application needed to consider their loan-to-value.
Loan-to-value compares the outstanding mortgage with the property’s assessed value.
For example, a £200,000 mortgage against a £250,000 property represents an 80% loan-to-value.
If the property’s assessed value falls, the loan-to-value rises. This could affect the mortgage products available.
Existing borrowers reviewing their deal could read about remortgage options.
Did house prices fall everywhere?
No national house price index can show the exact performance of every local market.
Property markets can behave differently according to:
- region;
- town or city;
- neighbourhood;
- property type;
- property condition;
- local employment;
- available housing supply;
- buyer demand;
- transport connections;
- school catchment areas.
A national monthly decline could exist while some local areas remained stable.
Equally, some properties could experience reductions greater than the national figure.
An index should therefore be treated as market evidence, not a valuation for an individual home.
A lender’s valuation also serves a different purpose from an estate agent’s appraisal.
The lender considers whether the property provides acceptable security for the proposed mortgage.
Could buyers negotiate lower prices?
A slower market can give proceedable buyers greater negotiating strength.
A proceedable buyer normally has their deposit, mortgage position and purchase arrangements sufficiently prepared.
However, submitting a very low offer does not guarantee acceptance.
Sellers may consider:
- the strength of the buyer’s position;
- whether the buyer has a property to sell;
- the length of any chain;
- local comparable sales;
- the seller’s moving plans;
- the likelihood of mortgage approval;
- the proposed completion timetable.
An offer should reflect the property, local evidence and the buyer’s budget.
It should not rely solely on a national headline.
Why mortgage preparation mattered during late 2022
The November market rewarded preparation more than prediction.
No buyer could know with certainty where prices or mortgage rates would move next.
However, they could establish what they could afford under the available conditions.
Before viewing properties, buyers could:
- Review their income and committed expenditure.
- Check their credit records for errors.
- Confirm the deposit and purchase costs.
- Estimate monthly repayments at different rates.
- Obtain an affordability assessment.
- Avoid making offers above a sustainable budget.
- Keep financial documents ready for the application.
The Residential Affordability Calculator can provide an initial borrowing estimate.
A calculator is not a mortgage offer. The lender must still assess the full application.
What could falling values mean for older homeowners?
Property values can also affect later-life financial decisions.
Some older homeowners may consider selling and moving to a smaller property. Others may investigate borrowing secured against their home.
These choices involve more than the latest monthly price movement.
They can affect housing security, inheritance, future flexibility and long-term costs.
Homeowners considering those choices can compare the practical differences between downsizing and equity release.
Equity release is not suitable for everyone. It can reduce the value of an estate and affect means-tested benefits.
What did the November 2022 figures tell us?
The November figures showed that housing demand could change quickly when borrowing conditions changed.
Property prices reflected more than the number of people wanting a home.
They also reflected whether those people could finance the purchase.
The market remained above its November 2021 level. Yet the monthly decline showed that recent momentum had weakened.
That combination was not contradictory.
It showed the difference between a market’s previous growth and its current direction.
For buyers, the practical question was not simply whether prices might fall further.
The more useful question was whether the property and mortgage remained affordable under realistic assumptions.
Reviewing a mortgage during a changing market
House prices provide one part of the housing market picture.
Mortgage rates, affordability and loan-to-value can be equally important.
A buyer should not make a long-term borrowing decision from one monthly index figure.
The sounder approach is to examine the property price, mortgage cost and household budget together.
Connect Mortgages can review available mortgage options based on your circumstances and the lender’s criteria.
Frequently asked questions
What was UK annual house price growth in November 2022?
Nationwide recorded annual UK house price growth of 4.4% in November 2022.
This was down from 7.2% during October 2022.
Did UK house prices fall during November 2022?
Nationwide recorded a seasonally adjusted monthly fall of 1.4%.
This followed a 0.9% monthly fall during October.
What was the average UK house price in November 2022?
Nationwide reported an average price of £263,788.
This figure represented its index and was not a valuation for every UK property.
Why did house price growth slow?
Higher mortgage borrowing costs reduced affordability and weakened buyer demand.
Financial market disruption following the mini-Budget also affected mortgage product pricing and availability.
Did lower house prices make mortgages more affordable?
Not always.
A lower purchase price could reduce the required loan. However, a higher mortgage rate could still increase monthly repayments.
Could every buyer borrow less?
No.
Borrowing depended on income, expenditure, deposit, credit profile, mortgage term and lender criteria.
The effect differed between applicants.
Did every UK property lose value?
No.
The index measured the national market. Local areas and individual properties could perform differently.
Your home may be repossessed if you do not keep up repayments on your mortgage
