House price falls slow but North-South divide widens

House price falls slow but North-South divide widens

0:01 AM, 12th June 2024, About a month ago

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House prices in England and Wales continue to decline, although the pace of decline is slowing with the average house price falling by 0.2% in May to £356,014.

According to the e.surv house price index, that’s still 3.3% lower than a year ago.

The slowdown comes despite the Bank of England delaying a cut in interest rates, which would typically make borrowing for mortgages cheaper.

The index also shows that price falls are unevenly distributed across the country.

The North East is the first region to see year-on-year price growth, while London and the South East continue to struggle.

Average sale price of a home in England and Wales

Richard Sexton, a director at e.surv, said: “This month, the average sale price of a home in England and Wales in May fell by just over £600 (0.2%) to £356,014 which is about £12,000, or 3.3%, lower than a year ago.

“Prices are now £23,000 (6.1%) below the peak reached in October 2022, but they still remain some £40,000 (13%) higher than at the start of the pandemic in March 2020.”

He added: “The pushing back of previously expected interest rate cuts by the Bank of England and the subsequent upward repricing of mortgage rates by lenders, has meant any anticipated help for borrowers has been short-lived.

“Less buyers, of course, has an impact on prices which we can clearly see being played out at a regional level.”

Regions showing the weakest price trends

Along with signs of a North-South divide, London, the South East and East of England are showing the weakest price trends and struggling to recover.

The index also shows there are regions where the battle over home working versus office working is being played out most intensely.

Mr Sexton said that the North-South reflects: “The much higher house price levels, affordability challenges and greater reliance on mortgage finance in these regions – factors that really impact first-time buyers whose prospects of buying have been facing headwinds for years now.

“Much of this may change after the coming election as political parties are already promising action to support the first-time buyer market.”


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