“The latest government house price index reveals prices saw a 0.8% drop in November compared to the month prior, and an annual price fall of 2.1% drop in the 12 months to November. This leaves the average property in the UK valued at £285,000.

“This annual decrease of 2.1% is a notable uptick compared to the 1.3% decrease seen in the 12 months to October, suggesting house prices have been further worn down by the challenging economic circumstances. However, it is worth noting that though it can be a difficult to get an accurate picture of how the housing market is faring, house price indices from lenders such as Halifax, which provide a more up to date view of the market, have painted a considerably more positive picture in recent weeks.

“Last year was incredibly challenging for the housing market, and cost of living pressures and high interest rates saw a marked decrease in the number of property transactions which had a knock-on effect on house prices. Though this morning’s data points to a downturn in prices, the housing market still appears to have coped relatively well overall given this is a far smaller fall than had been predicted in the wake of the Truss mini budget.

“There is a now sense that the property and mortgage markets have come through the worst of the turmoil of the past few years and as we look ahead to the rest of 2024, cautious optimism remains. Lenders have been consistently reducing their mortgage rates as swap rates have lowered, and reduced transaction levels have fed into a healthy competition between lenders which have been left battling for business.

“In the coming months, we may see more prospective buyers lured back to the market which could buoy prices, particularly if mortgage rates continue to fall. The surprise uptick in inflation this morning may mean the Bank of England maintains its ‘higher for longer’ stance for a little while longer, but rate cuts are widely expected to materialise as we move further into 2024 and those looking to secure a fixed rate mortgage could find that deals become increasingly more palatable. However, those with long term deals from the period of very low interest rates ending this year will find they are still faced with a considerable jump in their payments. Those looking to remortgage or purchase a new home this year would benefit from seeking professional mortgage advice to ensure they are making the best possible decisions for their personal circumstances.”