Slide in house prices is accelerating

Slide in house prices is accelerating

0:03 AM, 20th April 2023, About A year ago

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The UK’s house prices fell for the third consecutive month as prices slumped 0.3% between January and February, the Office for National Statistics (ONS) says.

Its data also reveals that average house prices grew 5.5% in the year to February – that’s down from January’s figure of 6.5%.

That is the lowest annual rise since October 2020.

Now the ONS says that the average house price is £288,000 – that’s £16,000 higher than a year before but still £5,000 below November’s peak.

‘House prices were on the slide for the third consecutive month’

Sarah Coles, the head of personal finance at Hargreaves Lansdown, said: “Average house prices were on the slide for the third consecutive month, and the average is now down £5,000 from the peak in November.

“The descent has picked up pace very slightly, and we can expect more falls from here – but there is still the glimmer of hope for a soft landing.

“There’s plenty of misery in the figures. Falls continued in February and actually picked up pace.”

She added: “As the RICS figures show, buyer demand had been falling for an impressive 10 consecutive months.”

The lowest average house price

The ONS data reveals that the lowest average house price can be found in the North East at £160,000 – and prices are up 7.6% in a year.

In London, prices hit £532,000 and are up just 2.9% in a year.

Flats are seeing far slower price growth – at just 2.1%.

‘Annual house price growth’

Ms Frances McDonald, the director of residential research at Savills, said: “The ONS index highlights that annual house price growth across the mainstream UK housing markets continued to slow in February.

“On a regional basis, lower value markets that are less constrained by affordability, such as the West Midlands and the North East, were the top performers whilst London recorded lower levels of annual price growth.”

‘Marginal reduction in the cost of homeownership’

The co-founder and chief executive of Wayhome, Nigel Purves, said: “A marginal reduction in the cost of homeownership will be warmly welcomed by those who have been firmly priced out of the market during the pandemic house price boom.

“However, the unfortunate reality is that despite the recent drop in house prices, homeownership remains far beyond the reach of many aspirational buyers, who simply can’t afford the sky-high costs associated with getting onto the property ladder.

“This issue has only worsened as the cost of borrowing has climbed in line with interest rates and we expect this additional financial pressure to further dampen market sentiment going forward.”

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