House prices were unchanged in December, matching the market consensus and ending 2023 just 1.8 percent lower on the year and 4.5 percent short of their all-time peak. On the month, the Nationwide measure has not fallen since August and shows that the housing market has been surprisingly resilient in the face of earlier aggressive interest rate hikes by the BoE.

Northern Ireland and Scotland even saw positive annual growth while the overall fourth quarter change in prices was a solid 0.8 percent. This was up from 0.2 percent in the three months to November and its strongest print since the third quarter of 2022. However, with the economy sluggish and consumer confidence weak, the Nationwide does not expect the likelihood of lower mortgage rates to be enough to boost prices in 2024. Rather, it anticipates a modest fall of up to 2 percent.

Today's update means the UK RPI closes out 2023 at minus 16 and the RPI-P at minus 8. Both readings point to a limited degree of overall economic underperformance that will encourage speculation about a cut in Bank Rate in the first half of the year.

Prices are expected to be unchanged on the month after a 0.2 percent increase in November.

The Nationwide House Price Index (HPI) provides house price information derived from Nationwide lending data for properties at the post survey approval stage. Nationwide house prices are mix adjusted; that is, they track a representative house price over time rather than the simple average price.

Home values affect much in the economy especially the housing and consumer sectors. Periods of rising home values encourage new construction while periods of soft home prices can damp housing starts. Changes in home values play key roles in consumer spending and in consumer financial health. During the first half of this decade sharply rising home prices boosted how much home equity households held. In turn, this increased consumers' ability to spend, based on wealth effects and from being able to draw upon expanding home equity lines of credit.

Although the Nationwide data are calculated similar to the Halifax method Nationwide substantially updated their system in 1993 following the publication of the 1991 census data. These improvements mean that Nationwide's system is more robust to lower sample sizes because it better identifies and tracks representative house prices. Historically, the data go back to 1952 on a quarterly basis and 1991 on a monthly basis.

Over long periods the Halifax and Nationwide series of house prices tend to follow similar patterns. This stems from both Nationwide and Halifax using similar statistical techniques to produce their prices. Nationwide's average price differs because the representative property tracked is different in make up to that of Halifax.