Better.co.uk's Home Buying Index: Are UK House Prices Falling?

To discover the underlying factors and trends that shaped the housing market in 2023, we analysed first-party data on first-time buyers and home movers.

Data analysed from mortgage recommendations issued.

Median property prices for first-time buyers

The median property value for first-time buyers between December 2022-May 2023 was £240,125
The median property value for first-time buyers between June-November 2023 was £238,499

This is a decrease of -0.67%.

The median deposit trend for first-time buyers remains at £30,000.

While the slight decline in 2023 property prices for first-time buyers was welcome, this modest decline is arguably less than what many were hoping for.

The 8.3% rise in median mortgage term length also suggests that first-time buyers are now borrowing for longer in order to reduce monthly repayments given where mortgage rates are.

For first-time buyers looking to get onto the ladder in 2024, consider trying to build your deposit size up as much as you can. The larger the deposit, the more favourable mortgage rates you are likely to be offered.

Median property prices for home movers

The median property price for home movers between December 2022 - May 2023 was £288,750
The median property price for home movers between June 2023 - November 2023 was £295,000

This is an increase of 2.16%.

Median property prices for home movers has remained fairly stable this year, largely thanks to a small rally in Q4 of 2023 - as suggested by other home buying indexes.

However, borrowing terms have increased by 8%, similar to first-time buyers, suggesting home movers are also looking for ways to reduce monthly repayments.

Median new build prices for first-time buyers

Identifying property prices by property type will allow us to more accurately see where house prices are rising for first-time buyers.

Flat prices saw a marked decline (-15% comparing November-May and June-November) in prices for first-time buyers. This is especially good news for Londoners, as 34.2% of our mortgage recommendations issued on standard new build flats were in London, providing a significant weighting.

Recommendations issued for detached and semi-detached properties were more spread out across England and Wales, as were terraced houses. This significant price increase for terraced properties (23%) could suggest fiercer competition in more built-up towns and cities.

Median new build prices for home movers

Mortgage recommendations issued for this cohort of buyers are spread across England and Wales. The declines seen suggests that detached new builds (-8.79% comparing December-May and June-November) in particular may have been difficult to sell this year.

The rise in new build flat prices for home movers (13.5%) may point to the trend of professionals looking to move back to the city after their covid-inspired country retreat.

With wider market analysis’ suggesting that properties could fall further in 2024, it’s not surprising the new build premium could put people off. This is could also be a reason why property developers are scaling back production in 2024, and why some developers are offering to pay the first year’s mortgage in order to keep prices high.

Median older property prices for first-time buyers

Surprisingly for first-time buyers, older properties (properties that have left the ownership of the developer) have generally increased in value this year (with the exception of flats). Recommendations have also been issued across the country, too.

Traditional first properties for first-time buyers, such as flats and terraced houses, have both seen median increases of 3.09% and 0.91% comparing December-May and June-November. Semi-detached properties have risen by 4.76%, and detached houses have risen by a whopping 17.8% for this cohort.

This demonstrates the ever-growing value of British property, with first-time buyers increasingly desperate to get on the property ladder while they can.

Median older property prices for home movers

The older property trend is similar for home movers. Price increases dominate the board when we analyse by property type and look at December-May and June-November:

Detached houses: 15.2% rise
Semi-detached houses: 12% rise
Flats: -0.37% decline
Terraced houses: 11.7% rise
Maisonettes: -14.4% decline

The increases we are seeing are potentially down to how rates have started to fall in the second half of 2023. As home movers have access to greater equity, the rates offered to this cohort are usually more favourable than those offered to first-time buyers.

As such, as lenders have started to find creative ways of offering lower mortgage rates to those with lower LTV (loan-to-value, and therefore pose less risk), people are more comfortable making property moves. It just depends on where you are looking and the property type you are after.

Lender Insights for first-time buyers

Our data indicates that Halifax is the dominant lender for first-time buyers purchasing either an older property or a new build. From supporting the governments Mortgage Guarantee Scheme to their Family Boost product, they’re an attractive, reputable lender for first-time buyers.

Jonathan Bone, one of our lead mortgage advisers, suggested that Halifax often have some of the most favourable rates for first-time buyers, as well as being one of the quickest to process applications.

Leeds Building Society’s lending criteria for first time buyers with low deposits and those requiring shared ownership mortgages - both of which are very common requirements with new build purchases – is another strong lender, putting it in second place at 10.62%.

For more information, take a look at our step by step guide to buying a new build

Lender Insights for home movers

Halifax again tops the charts as the common lender used for home movers purchasing either a new build or an older property.

Barclays, NatWest, and HSBC are much stronger, however, for this cohort of customers.

Average property prices by city for first-time buyers

Insights for first-time buyers reveals how the UK’s major cities compare to each other.

The data also revealed which locations have seen the biggest pricing fluctuations over the past year.

While these differences do not indicate actual prices, they may give an indication as to where house prices are starting to increase and decrease.

Average property prices by city for home movers

Insights for home movers reveals how the UK’s major cities compare to each other.

City insights for home movers revealed which locations have seen the biggest pricing fluctuations over the past year.

While these differences do not indicate actual prices, they may give an indication as to where house prices are starting to increase and decrease.