Average UK house price slows from 6.5% in January this year

UK house price

The typical property value stood at £288k in February, which is £16k more than 12 months prior but £5k below a recent high in November 2022, according to the ONS

The average UK house price rose 5.5% during the 12 months to February this year, slowing from 6.5% in January this year, as per official figures.

The typical property value stood at £288k in February, which is £16k more than 12 months prior but £5k below a recent high in November 2022, according to the Office for National Statistics (ONS).

Annual house price growth in February this year was less than half than that in July 2022, which stood at 14.4%.

On a month-on-month basis, the Office for National Statistics stated average house prices dropped in February 2022 for the third consecutive month.

On a seasonally adjusted basis, the average UK house price dropped 0.3% in February this year.

Commenting on the report, Tom Bill, head of UK residential research at Knight Frank, stated: We anticipate prices to drop by a few per cent this year since there will be more financial pain but the landing will be relatively soft because of a strong jobs market, savings done during the Covid crisis, record-high levels of housing equity and the big proportion of people who move because they need to.

The data was released on the same day the Office for National Statistics disclosed that Consumer Prices Index (CPI) inflation slowed from 10.4% in February to 10.1% in March.

Inflation continued to be higher than experts had forecasted, as food and drink costs continued to surge.

Jeremy Leaf, a north London estate agent, stated that inflation concerns continue and buyers want value so they are flexing their muscles before making decisions.

Nicky Stevenson, managing director at Fine & Country, stated: Inflation is proving stronger than anticipated, but it is still broadly anticipated to drop steeply later during the year.

Stevenson further stated: Sellers are much more open to negotiate, especially if they have interest from chain-free FTBs.

Mark Harris, chief executive of SPF Private Clients, said: The drop in inflation is welcome and means it is growingly likely that (BoE) base rate is near its peak.

In spite of the continued high cost of living, green shoots and strength in the housing market are apparent. Lenders anticipate tightening credit lines over the next three to six months but no credit crunch, he said.

Pricing on new mortgages continues to trend downwards, providing welcome relief for borrowers, even though the rate of drops is slowing, he said.

Average house prices rose over the 12 months to £308k (6.0% annual rise) in England, £215k in Wales (6.4%), £180k in Scotland (1.0%) and £175k in Northern Ireland (10.2%).

In England, the West Midlands saw the largest annual percentage rise in house prices in February, at 8.6%, while London saw the least rise, at 2.9%.

Average house prices in London continue to be the highest of any UK region, with an average price of £532k in February this year.

The Office for National Statistics cited recent HM Revenue and Customs (HMRC) data, which showed a drop in house sales.

Some 90,340 house sales were recorded in February this year, which was 18.2% below than February last year and down 4.1% than in January this year.

The Office for National Statistics also released figures showing that private rental prices rose 4.9% in the 12 months to March this year, reflecting the biggest annual percentage change since similar records in 2016.

The annual growth rate of UK private rental prices began to rise during H2 2021, the Office for National Statistics stated.

The Office for National Statistics underlined a related report from the Rics, suggesting solid demand for homes in the rental sector.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Invest for Property. The information provided on Invest for Property is intended for informational purposes only. Invest for Property is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

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