The ongoing London housing crisis has been wild but far from unpredictable. As an interconnected web of real estate, what happens in one area can greatly impact another. This was a big reason why rising house prices also caused rent prices to skyrocket as well. Nick Millican has looked at the facts and noticed that in December of 2023, housing prices fell a bit, and the reason why is surprising.

Cause and Effect

To understand why housing prices falling is such a big deal, you first have to understand that overall sales were up in December by a huge 18%. On top of this, buyers were making 30% more inquiries so many people wanted to buy a home during this timeframe. And this is where real estate agents such as Nick Millican come in.

Logically, within the housing industry, you would think that this increased demand would cause housing prices to rise. However, Nick Millican knew that would not be the case. Instead, what we saw was home prices falling by nearly 4% in some cases.

The Explanation

The reason that there were so many home buyers in December can be explained by the fact that the uncertainty in the market caused them to hold off until the end of the year to make a purchasing decision. But what about the falling prices?

Nick Millican notes that higher borrowing costs may have played a role but also cites the fact that prices are falling faster in places where they went up the fastest. In other words, the property purchase market is just moving back to a state of equilibrium. That said, housing prices are still much higher than they were before the pandemic and will likely remain that way for some time.