Statistics office also reports on the UK rental market
The average house price in the UK fell by 1.2%, or an equivalent of £3,000, to £288,000 in the year to October 2023, the latest figures published by the Office for National Statistics (ONS) have shown.
House prices dropped further in October compared with the previous month, which recorded a 0.6% annual fall. ONS said UK house price annual inflation has been generally slowing since July 2022, when annual inflation was 13.8%.
Over the past year, average house prices decreased in England to £306,000 (-1.4%), decreased in Wales to £214,000 (-3%), but increased in Scotland to £191,000 (+0.2%). 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 October 2023 also revealed that among all English regions, the North East saw the only annual percentage increase in average house prices in the 12 months to October at 0.2%, while London saw the largest fall at -3.6%.
Average UK house prices decreased by 1.2% in the 12 months to October 2023 (provisional estimate)🏠
— Office for National Statistics (ONS) (@ONS) December 20, 2023
This is down from a fall of 0.6% in the 12 months to September 2023.
➡️ https://t.co/4izJZqn4eT pic.twitter.com/lQADUv9gi8
“Another drop in October probably signifies the beginning of the expected cooling of house prices starting to filter through, but I’m not expecting a sharp decline,” Emma Cox, managing director of real estate at Shawbrook Bank, commented. “The shortage of available homes on the market is contributing to the relative resilience of house prices.”
Richard Harrison, head of mortgages at Atom bank, said the latest ONS data on house prices demonstrates a softening of pricing rather than the property crash that some had predicted this year.
“We’ve seen Rightmove predict that prices will fall by an average of 1% next year,” Harrison added. “It’s important to remember that within this nationwide forecast, there will obviously be regional differences, with some areas performing better than others.
“However, the overall picture of a relatively flat market should entice more buyers early next year as they look to get ahead of any potential future increases.”
According to Tomer Aboody, director at MT Finance, more confidence is coming through the property market as the end of the year approaches.
“With interest rates on hold, combined with another fall in inflation, we should see a better and stronger market in 2024,” Aboody said. “With the government desperate for some positive news, a restructure of stamp duty may also be on the cards to further bolster positivity and activity.”
Meanwhile, in the private rental market, prices paid by tenants rose by 6.2% in the 12 months to November, up from 6.1% in the 12 months to October.
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 6.1% in England, by 7.3% in Wales, and by 6.2% in Scotland. Within England, London had the highest annual percentage growth in private rental prices at 6.9%, while the North East saw the lowest at 4.7%.
“For professional investors, the rental market is still active with demand outstripping supply and rents continuing to rise,” Cox said. “While there’s certainly some diversification into commercial property and other asset classes from portfolio landlords, the buy-to-let market is here to stay, and we expect strong demand for the finance to support these opportunities in 2024.”
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