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18:00 PM, 20th September 2023, About 7 months ago
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House prices in the UK increased by just 0.6% in the year to July – down from the 1.9% rise seen in June, the Office for National Statistics reveals.
The ONS also says that the seasonally adjusted figure shows that house prices fell 0.5% between June and July.
Homeowners in London saw the highest average price at £534,000 – but that is 0.8% lower than a year ago.
And homes in the South West saw the worst price drop over the past year with prices falling 1%.
The average UK house price is now £290,000 – that’s £2,000 higher than 12 months ago and £2,000 below November’s peak.
Sarah Coles, the head of personal finance at Hargreaves Lansdown, said: “The property market is still clinging onto gains, but it’s losing its grip. In the year to July, it squeezed out growth of 0.6% across the country, but prices fell nationwide during the month itself.
“We’re now seeing annual price falls in two regions, and this may well spread.”
She added: “This set of figures reflect sales agreed as early as April, when the market looked more attractive. Mortgage rates were still falling, and there was hope that we were in for a soft landing.
“However, it’s not all bad news. The fixed rate mortgage market has continued to fall from the August peak, and the average two-year fixed rate is now under 6.6%.”
Iain McKenzie, the chief executive of The Guild of Property Professionals, said: “Despite gloomy predictions, house price growth is still positive, and good news on inflation means that the market can be optimistic about autumn.
“Sellers may worry about the value of their home, but it’s important to remember that it’s still worth much more than it was prior to the pandemic.
“Continuing buyer demand is helping hold up the market and keeping property prices buoyant in the face of challenging conditions.”
Marc von Grundherr, a director of Benham and Reeves, said: “Much has been made about the decline of the property market, but the truth of the matter is that house prices continue to sit at their highest levels this side of the Millennium and only marginally off the market peak seen towards the backend of last year.
“There are sure signs that stability is returning to the London market, with the capital seeing one of the strongest rates of monthly house price growth.”
Octane Capital’s chief executive, Jonathan Samuels, said: “Not only have house prices remained impervious to the wider economic landscape, but inflation has fallen by a greater degree than expected and the Bank of England may well choose to keep the base rate frozen at 5.25% as a result.
“This will be welcome news for the nation’s homebuyers who have already started to benefit from many lenders reducing their fixed rate offerings this week in response to a drop in swap rates.
“Looking forward, further reductions to mortgage rates could be on the cards as the economic picture improves, although it’s too soon to say for sure.”
The managing director of House Buyer Bureau, Chris Hodgkinson, said: “The property market has become an increasingly difficult place for buyers in recent months and this dent in market activity has caused the rate of house price growth to slow.
“Given the lagged nature of house price reporting a reduction could well be on the cards, however, a return to normality is no reason to run for the hills in anticipation of a market crash.”
