It also reports on the private rental market
The average house price in the UK increased by 0.2% to £291,000 in the year to August 2023, the latest figures published by the Office for National Statistics (ONS) have shown.
Though the average UK house price changed marginally from 12 months ago, it was £9,000 above the recent low point in March 2023.
Over the past year, average house prices remained little changed in England to £310,000 (0.0%), decreased in Wales to £217,000 (-0.1%) and increased in Scotland to £194,000 (1.1%). Average house prices increased by 2.7% to £174,000 in the year to Q2 2023 in Northern Ireland.
The UK House Price Index for August 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 August 2023 (3.6%), while the East of England saw the lowest (-1.6%).
Average UK house prices increased by 0.2% in the 12 months to August 2023 (provisional estimate) 🏠
— Office for National Statistics (ONS) (@ONS) October 18, 2023
This is down from a revised 0.7% in July 2023.
➡️ https://t.co/QQZP6YUpgx pic.twitter.com/M04SaPE3jm
“UK average house prices are little changed from a year ago, but annual inflation is rising in Scotland,” said Aimee North, head of housing market indices at the Office for National Statistics. “In the year to August, average house prices rose fastest in the North East, but fell across southern and eastern England.”
Nicky Stevenson, managing director at national estate agent group Fine & Country, remarked that while the ongoing pressure on household finances dampened house price growth over the summer, the property market remained resilient.
“Although we are seeing some downward pressure on prices this autumn – partly as stronger supply is providing buyers with more headroom to haggle – the market is in a relatively stable position,” Stevenson said.
“Today’s announcement that inflation held steady in September will raise questions about the Bank of England’s next move. The most recent decision not to increase the base rate has provided a boost for the property market, and a repeat would likely further bolster activity.
“The good news for sellers is that buyers are very highly motivated, albeit being careful not to overstretch themselves financially. With the average time taken to complete a sale taking 20 weeks, most agreeing an offer now will probably not move until the new year.”
Paul Glynn, chief executive at Air, added that while house price growth had flattened out, a number of mainstream lenders had recently reduced their mortgage rates as they priced in future base rate rises.
“This will ultimately have a positive impact on buyers’ sentiment,” Glynn said. “What this shows is that the property market continues to be resilient despite growth slowing compared to the usual October uplift.
“As borrowers navigate the complexity of the market, it is important that advisers support their customers with a range of solutions to meet their individual financial needs. With this in mind, access to effective sourcing systems and affordability tools will be crucial for advisers to achieve the best possible outcomes for their clients.”
Rents continue to climb in September
In the UK private rental market, prices paid by tenants rose by 5.7% in the 12 months to September, up from 5.6% in the 12 months to July.
ONS, in its Index of Private Housing Rental Prices report for September 2023, revealed annual private rental prices increased in all the UK countries and English regions.
Rents grew by 5.6% in England, by 6.9% in Wales, and by 6% in Scotland. Within England, London had the highest annual percentage growth in private rental prices at 6.2%, while the North East saw the lowest at 4.7%.
“UK rental prices continue to surge reaching record highs for the 18th month in a row,” North said. “Nationally, Wales experienced the highest annual inflation in Great Britain, while London rents continue to rise faster than in other English regions.”
Sophie Pollard, director of estate and lettings agency MyHaus Brighton, commented that the rental market was “in a hugely challenging place right now.”
“Rents are high and with landlords continuing to sell, supply is dwindling, pushing rents even higher,” she said. “High mortgage rates are forcing landlords to increase rents simply to cover costs.
“In time, although it’s likely happening already, this will have an effect on standards as landlords rely on rental income to make repairs and maintain properties for their tenants. Since August we have seen many landlords either coming to market to offload their units or at least to explore their options.
“Overall, the impression we’re getting is that landlords do want to continue and keep hold of their investments, but in a way that is profitable. Landlords who are highly leveraged are in a particularly difficult position right now.”
Harriet Scanlan, lettings manager at estate agency Antony Roberts, added that the rental market continued to demonstrate its strength, with no significant dip in rents being observed recently.
“The supply and demand chain continues to strongly favour landlords,” Scanlan pointed out. “With limited rental properties available and high demand from tenants, it remains a landlord’s market, enabling property owners to enjoy favourable terms and conditions.
“Our rental properties continue to attract a substantial number of enquiries, underscoring the strong appetite for rental properties within our area.”
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