UK house prices begin to COLLAPSE with one luxury property slashed by £4MILLION - '10% fall imminent'

The UK is on the cusp of more house price drops following five consecutive months of the trend, according to Halifax.

The latest House Price Index from the lender shows average property values fell by 1.5 per cent in December 2022, while annual growth slowed from 4.6 per cent in November to 2 per cent in December.

The annual growth rate dipped in all nations and regions over December, a long way from the 9.7 per cent price inflation recorded at the beginning of the year.

In 2022, house prices ended at £281,272 on average, up 974 per cent since early 1983.

Kim Kinnaird, director at Halifax Mortgages, said: “As we enter 2023, the housing market will continue to be impacted by the wider economic environment and, as buyers and sellers remain cautious, we expect there will be a reduction in both supply and demand overall, with house prices forecast to fall around 8 per cent over the course of the year.

The eight-bedroom mansion has suffered a 47.1 price reduction
Image: Zoopla

“It’s important to recognise that a drop of 8 per cent would mean the cost of the average property returning to April 2021 prices, which still remains significantly above pre-pandemic levels.”

One UK mansion dropped in price by a staggering £4.5million, in Llanhennock, Newport.

The eight-bedroom property has suffered a total reduction of 47.1 per cent.

The beautiful Grade II Georgian Manor House is complete with a tennis court and its own lake.

Tom Bill, head of UK residential research at estate agent Knight Frank, said: “The latest data shows two things are happening at the same time.

"First, the effect of the mini-budget is working its way through the system, which means that monthly declines are narrowing.

“At the same time, an annual fall in house prices appears imminent, underlining how the lending landscape has changed irrespective of the mini-budget.

“As rates normalise, buyers will increasingly recalculate their financial position and house prices will come under pressure.

"We expect a 10 per cent decline over the next two years, taking them back to where they were in mid-2021.”

Here are average house prices across the UK and the annual increases, according to Halifax (the regional annual change figures are based on the most recent three months of approved mortgage transaction data due to smaller sample sizes and so they are not directly comparable to the annual house price growth rate for the UK as a whole for the month of December):

– East Midlands, £241,850, 6.7%

– Eastern England, £337,215, 5.5%

– London, £541,239, 2.9%

– North East, £169,980, 6.5%

– North West, £226,549, 7.2%

– Northern Ireland, £183,825, 7.1%

– Scotland, £200,166, 3.5%

– South East, £395,103, 5.8%

– South West, £304,896, 6.0%

– Wales, £217,547, 6.1%

– West Midlands, £250,965, 7.3%

– Yorkshire and Humber, £205,466, 6.6%