Industry experts react to government data
The average price of a house in the UK was £296,422 in October, up 12.6% annually and 0.3% monthly, official government figures showed.
The latest figures published by HM Land Registry (HMLR) revealed that house prices increased by £33,000 in the 12 months to October, but little changed in the average house price from last month.
The Office for National Statistics noted that the increase in the annual percentage change was partly caused by a sharp fall in UK average house prices in October 2021, following changes to Stamp Duty Land Tax.
Average house prices increased over the year to £316,000 (13.2%) in England, to £224,000 in Wales (11.8%), to £195,000 in Scotland (8.5%), and to £176,000 in Northern Ireland (10.7%).
“At first glance, this most comprehensive of all the housing market surveys seems to demonstrate considerable resilience,” Jeremy Leaf, north London estate agent and a former RICS residential chairman, said. “However, digging a little deeper, these numbers reflect what was happening in late summer and early autumn, not what we’ve been seeing in our offices since.
“Most demand, fuelled by mortgages arranged on more advantageous terms, seems to have been satisfied. A better test will come in early 2023 when a large proportion of buyers have to decide whether they will continue to press the pause button or review their searches in response to lower mortgage rates and inflation figures.”
Scott Clay, head of introducers at specialist lender Together, added that this uplift in house prices is likely to be short-lived as a downturn is overdue.
“With many struggling to fit the tightening mortgage lending criteria of mainstream banks, consumer demand will continue to deplete,” Clay said. “During these difficult economic conditions, specialist lenders will be able to offer flexible criteria for individual circumstances and assess applications on a case-by-case basis.”
Dariusz Karpowicz, director at Doncaster-based mortgage broker Albion Financial Advice, said that the latest HMLR data, though skewed by the Stamp Duty holiday, has yet to reveal the full impact of the mini budget and the chaos of the past two to three months.
“Property values are almost certainly now heading down,” Karpowicz pointed out. “However, I’m not convinced that house prices will fall by as much as 30% as some are predicting. That would be an apocalyptic event in the property market. Prices will undoubtedly stall, and we could see drops of 10% in some areas, but the lack of supply will act as a glass floor under property values.”
