House prices – what does the latest government data reveal?
Average house prices in the UK had an annual decrease of 0.2% in February, improving from the 1.3% decline in the previous month, the Office for National Statistics (ONS) has reported.
The average price of a UK house stood at £281,000, with annual house price decreases of 1.1% to £298,000 in England and 1.2% to £211,000 in Wales.
In contrast, Scotland reported a 5.6% increase, bringing its average house price to £188,000. Northern Ireland saw its average price rose by 1.4% to £178,000 in the final quarter of 2023.
The latest UK House Price Index also revealed that of the English regions, annual house price inflation was highest in the North East at 2.9%, while London had the lowest annual inflation, with house prices falling by 4.8% in February.
“Despite the initial rate cuts by the ‘big six’ lenders at the beginning of the year, the momentum of the mortgage price war has slowed,” noted Josh Skelding, commercial director at Fignum. “With financial markets now adjusting their expectations for an interest rate cut later in the year and economic uncertainties driving up swap rates, lenders are gradually reverting to higher pricing, which is reflected in house prices.
Average UK house prices decreased by 0.2% in the 12 months to February 2024, to £281,000 (provisional estimate)🏡
— Office for National Statistics (ONS) (@ONS) April 17, 2024
This is up from a decrease of 1.3% (revised estimate) in the 12 months to January 2024.
➡️ https://t.co/MlsvSXmpa4 pic.twitter.com/g8fhPD2Kwe
“Yet, amid the uncertainties, there are reasons for optimism. Moving into the spring months, which typically witness a surge in home listings unlike any other season, the market is poised to entice more potential buyers, driving increased engagement.”
Ruth Beeton, co-founder of Home Sale Pack, agreed saying “it’s certainly shaping up to be a case of full speed ahead for the spring and summer months with respect to housing market activity.”
“As a result, we anticipate that the sluggish rates of sold price growth seen over the start of the year will soon start to unseasonably snowball,” Beeton added. “Those considering making their move are best advised to get a jump on this seasonal surge in market activity, as while it may be great for upward house price growth, it will also bring longer transaction timelines and a greater threat of fall throughs.”
Malcolm Webb, technical director at Legal & General Surveying Services, said there is no denying that the mortgage market has its challenges as it is still sensitive to pricing.
“Advisers continue to do a brilliant job in juggling all these factors and more, and are, without a doubt, the lifeblood of our industry,” Webb pointed out. “Our market has shown its long-term resilience time and time again, and as prices drop slightly, we may see increases in buyer demand.
“There are other reasons to be cautiously optimistic for a stronger Q2, with the brighter weather, clocks moving forward, and a string of bank holidays encouraging buyers to dip their toes back in the water. Rates continue to adjust from their summer 2023 peak, and the London market is starting to rebound after a muted 2023. A home in the capital is now more likely to sell above its asking price than anywhere else in England and Wales for the first time since 2016.”
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