ONS also reveals rental market numbers
The average house price in the UK fell by 0.1% to £291,000 in the year to September 2023, the latest figures published by the Office for National Statistics (ONS) have shown.
While little has changed in the average UK house price from 12 months ago, it was £9,000 above the recent low in March 2023.
Over the past year, average house prices decreased marginally in England to £310,000 (-0.5%), decreased in Wales to £215,000 (-2.7%) and increased in Scotland to £195,000 (+2.5%). Average house prices increased by 2.1% to £180,000 in the year to Q3 2023 in Northern Ireland.
The UK House Price Index for September 2023 also revealed that among all English regions, the North East saw the highest annual percentage change of all English regions in the 12 months to September at 1.6%, while the East of England saw the lowest at -1.6%.
Ben Waugh, managing director at more2life, said that as the ongoing cost-of-living crisis squeezes consumers’ disposable incomes, it was not too surprising that house price growth is slowing down in response to relaxed demand.
“Although the overall market is now trending towards a more regular groove, the data for September will not reflect the Bank of England’s decision to hold the base rate at 5.25%, so it may be a few months before we can tell whether these economic shifts are translating to increased competition in the property market.”
Nonetheless, Tony Hall, head of business development at Saffron for Intermediaries, believes the latest decision by the Bank of England to hold the base rate at 5.25% will certainly bring stability to the market.
“As confidence starts to return to the sector, we are likely to see an uptick in demand and the value of housing stock bounce back,” Hall commented.
Alan Davison, director of customer sales at Together, said the fall in house prices is welcome news, especially for first-time buyers who have previously been locked out of the market because of affordability issues.
“As we enter 2024, we’re expecting a further softening in demand from amateur buy-to-let landlords for good quality, smaller homes,” he added. “We’re already seeing BTL investors exiting the market, which is unsurprising given the succession of tax and regulatory changes, on top of higher rates increasing monthly mortgage payments.
“However, this exodus may lead to a larger choice of properties coming up for sale, presenting more affordable opportunities for first-time buyers and second steppers who’ve previously struggled to navigate the tricky property market.
“We are also waiting to see how any announcements in this month’s Autumn Statement will impact people’s property plans next year. With the King’s Speech confirming housing market reform will be addressed as part of this, all eyes will be watching for any signs of new policies and solutions to boost homeownership.”
Rents rise again in October
In the UK private rental market, prices paid by tenants rose by 6.1% in the 12 months to October 2023, up from 5.7% in the 12 months to September.
ONS, in its latest Index of Private Housing Rental Prices report, revealed annual private rental price increases in all the UK countries and English regions.
Rents grew by 6% in England, by 6.9% in Wales, and by 6.2% in Scotland. Within England, London had the highest annual percentage growth in private rental prices at 6.8%, while the North East saw the lowest at 4.7%.
“The outlook for landlords and renters is perhaps less rosy as government interventions, onerous regulations and a serious lack of supply of suitable properties for rent, mean that rapid increases in average rents will continue,” commented Ross McMillan, owner and mortgage advisor at Blue Fish Mortgage Solutions.
Harriet Scanlan, lettings manager at Richmond estate agency Antony Roberts, however, said that tenants are now experiencing a welcome shift as there has been a slight increase in housing stock.
“The lettings market continues to stand strong, showcasing its resilience even in the face of economic fluctuations,” Scanlan added. “Despite a slightly expanded pool of properties, rents have managed to remain stable.”
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