Average house price fell for the third consecutive month
The price of an average house in the UK was £288,000 in February 2023, slightly down from the previous month’s average price of £290,000.
Latest house price data supplied by HM Land Registry, Registers of Scotland, and Land and Property Services Northern Ireland showed annual price growth of 5.5% in February, which was lower than the 6.5% recorded in January.
UK average house prices increased by 5.5% in the year to February 2023, down from 6.5% in January 2023.
— Office for National Statistics (ONS) (@ONS) April 19, 2023
➡️ https://t.co/EXGBSuUtaT pic.twitter.com/As4vOJPhaD
The Office for National Statistics (ONS), in its UK House Price Index report, noted that while the average UK house price was £16,000 higher than what it was 12 months ago, it was £5,000 below the recent peak in November 2022.
It added that the average UK house price has fallen for the third consecutive month, on both a seasonally adjusted basis and a non-seasonally adjusted basis.
“Higher interest rates have dampened the appetites of the nation’s homebuyers in recent months, and so we’re no longer seeing the same feeding frenzy with respect to demand and supply imbalance of the market,” Marc von Grundherr, director at estate agency Benham and Reeves, commented.
“As a result, buyers simply aren’t having to offer over the odds to secure their desired property and nor are they willing to, given the higher cost of borrowing. This has caused house prices to normalise, but we’re yet to see any notable reduction as sellers continue to secure a fair price in current market conditions.”
Scott Clay, head of introducers at Together, added that the fall in February’s house prices show the current lack of consumer confidence in the market.
“Potential sellers, while keen to pursue property plans in what is typically a seasonally busier period, may be inclined to wait for further stability,” Clay said. “However, that is not to say all activity is at a standstill. Buyers may be able to benefit from lower rates as inflation begins to start falling to lower levels than their peak last October.”
Nicky Stevenson, managing director at estate agent group Fine & Country, remarked that house prices held up much more strongly at the start of the year than people anticipated, as the market fought back from the disastrous mini budget.
“All signs point to a strong showing for the property market over the next few months, in what is traditionally a very busy period,” Stevenson added. “Sellers are flocking back, with the ratio of new sales to instructions returning to pre-pandemic levels, and increasing stock levels is leading to a much healthier market overall.
“Crucially, first-time buyers are also back on the march, undeterred by the recent end to the Help to Buy scheme. Even though higher mortgage rates have reduced their buying power compared to last year, sellers are much more open to negotiate, particularly if they have interest from chain-free first-time buyers.”
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