The data, which is based on information from the Land Registry, shows over the year to November 2022, house prices rose by 10.3% – this compares to an annual rise of 12.4% in October.
This provides further evidence of a slowdown in house prices.
Both the Halifax and Nationwide indices have shown price slumps and the ONS figures, which are based on house sales during November, confirm values are certainly taking a downward turn.
But Sharon Hewitt, MD at Beaconsfield-based relocation company, Chiltern Relocation said it may not be as dramatic as it seems. “Prices may be nudging down but we are not witnessing the sharp slowdown many predicted,” she said.
“On the contrary, we have received more enquiries at the start of the year than last year and speaking to estate agents daily, they happily report a strong start to the year with higher viewings levels than they expected.”
And Nicky Stevenson, managing director at national estate agent group Fine & Country, said: “Annual house price growth in November may look like a surprise on paper, but the ONS does something other indices don’t — it takes cash buyers into account.
“The prime market in particular is still buoyant, especially among cash buyers, and this may be a factor in keeping prices at this level.”
How will the cost-of-living impact house prices?
As the ONS data looks at house sales before households began to feel the realities of rising energy bills and the full extent of interest rate rises, not all experts were as confident.
Charlotte Nixon, mortgage expert at Quilter said: “As we head into 2023, the UK must brace for further house price drops as increased energy bills will still cause financial strain for millions in the upcoming months.
“As a result, many might be more hesitant to move and incur all the expense that comes with it. The Financial Conduct Authority (FCA) estimates that 750,000 people are at risk of defaulting on their mortgage and these people may be looking to sell up to release equity in their home and avoid getting into financial difficulty.
“This could lead to an increase in housing stock when demand is depressed, causing house prices to drop lower.”
There was some positivity from the Bank of England which has said the volatility that sent mortgage rates soaring has now normalised.
Nixon said: “This, coupled with Prime Minister Rishi Sunak’s recent statement that inflation is expected to halve in the next year, and today’s slightly lower inflation figure, hopefully indicates a permanent change in direction for the mortgage market.
“Lower inflation should mean interest rates stabilise and even start to drop with mortgage rates following suit. This could result in mortgage rates dropping to 4% by the end of the year as the new norm, and potentially even lower in the future.”
