It also publishes new stats on rental prices
Average house prices in the UK decreased by 0.6% in January, improving from the 2.2% decline noted in the year to December 2023, the Office for National Statistics (ONS) has reported.
The average price of a UK house stood at £282,000, reflecting a £2,000 drop from the previous year, with England experiencing the largest regional drop at 1.5% to £299,000, and Wales recording a smaller 0.8% drop to £213,000.
In contrast, Scotland reported a 4.8% increase, bringing its average house price to £190,000. Northern Ireland saw its average price rise 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, the North West experienced the highest annual house price inflation at 1%, while London recorded the most significant annual decrease, with house prices falling by 3.9%.
Average UK house prices decreased by 0.6% in the 12 months to January 2024 (provisional estimate) to £282,000 🏡
— Office for National Statistics (ONS) (@ONS) March 20, 2024
This is up from a decrease of 2.2% (revised estimate) in the 12 months to December 2023.
➡️ https://t.co/Q54iZjdn0u pic.twitter.com/LOoUWWk4ST
“There are signs that house price falls are starting to slow,” said Richard Harrison, head of mortgages at Atom bank. “Ongoing economic pressures and affordability constraints at the start of the year meant that buyer confidence did not fully return to the housing market.
“Looking ahead, while the jury is still out on whether we will see further house prices fall in Q2, the news last week that the UK economy returned to growth in January, should, in part, help boost buyer confidence. News this morning that inflation is falling faster than expected will also be well received, increasing expectations of base rate cuts and lower mortgage rates.”
For Mark Harris, chief executive of mortgage broker SPF Private Clients, the latest development on inflation puts pressure on the Bank of England to be bold and start cutting interest rates.
“With inflation heading in the right direction, a rate cut will give the housing market a welcome boost,” he said.
“Falling interest rates will have a knock-on effect on swap rates, which underpin the pricing of fixed-rate mortgages. Five-year swap rates fell this morning to 3.90% from 3.97% yesterday, and if this trend continues, lenders will have more confidence and ability to reduce mortgage rates, which in turn will boost borrower affordability.”
Jason Harris-Cohen, chief executive of Open Property Group, commented that the latest sold price figures show that the property market has started 2024 on the front foot.
“While it certainly remains a case of not running before we can walk, we’ve seen consistent evidence that market health is improving on a number of fronts,” Harris-Cohen said. “As it stands, the outlook for the year ahead is positive and this improving sentiment is only likely to strengthen in the event that interest rates are reduced.”
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