Thursday, August 11, 2022
Real EstateUK

Residential property prices fall from a record high

Residential property prices

The ONS reported that the average price of home in Britain dipped to £268,000 in October from £271,000 in September

The end of the stamp duty holiday has resulted in residential property prices slipping back from a record high, the latest government data released yesterday showed.

The Office for National Statistics (ONS) reported that the average price of home in Britain dipped to £268,000 in October from £271,000 in September.

In the 12 months to October, property prices increased by 10.2%, or about £23,000. That was below the 12.3% annual growth posted the previous month.

The ONS data is at odds with the recent surveys published by Nationwide and Halifax, which both reported a continued rise in prices since the stamp duty holiday ended.

Reacting to the report, Lawrence Bowles, director of research at Savills, commented: Annual house price growth slowed across most UK regions in October, according to the latest data from the ONS this morning. UK average prices rose 10.2% in the year to October 2021, down from 12.3% growth in the year to September.

London and the East of England bucked the trend, however, with accelerating growth. House prices in London rose 6.2% in the year to October, compared to just 2.8% annual growth the previous month. While values in the East of England crept up to 11.2% from 10.8% the previous month, he said.

We expect UK house price growth to continue easing through the tail end of the year, as the market slows in the run-up to Christmas. The latest data from TwentyCi shows the number of homes listed for sale in November remained 8% below the 2017-19 average, while the number of sales agreed ran 16% higher than normal. With limited stock available to purchase and little sign of demand easing, we can expect to see a strong start to price growth in 2022, he said.

Lucy Pendleton, property expert at independent estate agents James Pendleton, commented: House prices have tripped over the loss of the stamp duty tax break but it was a stumble rather than a fall. That said, change is in the air and house prices fell in October across 70% of UK regions. That was quite a turnaround in a single month.

Double-digit annual growth going into the Christmas season is still a phenomenal showing given the challenges that have dogged the economy for nearly two years. However, it now looks like the market is pulling away from dizzying annual growth that has characterised the UK’s Covid-era housing market, Pendleton said.

This signals what could become a bit of a changing of the guard as we head into 2022. London has trailed the wider country in terms of house price growth during Covid but is showing signs of a resurgence. This is being helped by the fact that it has become better value in relative terms with every month that has gone by where the rest of the country has eclipsed its gains, she said.

Iain McKenzie, CEO of The Guild of Property Professionals, said: Although we’re nearing the end of the year, it’s important to remember that this data is from the time when the stamp duty holiday had just ended.

He said: House prices eased across the UK as the rush to snap up property subsided, although this was only a gentle softening compared to the strong growth we’ve seen over the past year.

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