0:02 AM, 25th May 2023, About 9 months ago 1
Property prices in the UK have fallen for the fourth month in a row as values dropped by 0.9% between February and March, the Office for National Statistics (ONS) reveals.
Its latest house price index shows that the average house price climbed by 4.1% in the last year.
However, that annual rate of increase is lower than seen in February at 5.5%.
The average house price is now £285,000, that’s £11,000 more expensive than this time last year – but £8,000 lower than November’s peak.
The data also shows that London’s property prices are barely holding on – increasing by 1.5% in the last year, with new build properties increasing by 11.1%.
Sarah Coles, the head of personal finance at Hargreaves Lansdown, said: “House prices fell again in March, but so far, the slide has been short and shallow, and there’s every chance we could be heading for a soft landing.
“The immediate future could be bumpy. RICS figures continue to show a dearth of demand, with the number of new buyers falling in both March and April.”
She added: “The strength in the market owes a great deal to the labour market.
“Unemployment has been at real lows, and we haven’t yet seen much movement – the Bank of England does expect this to rise to 4.4% in 2024, but this is still relatively low by historic standards.”
Frances McDonald, the director of residential research at Savills, said: “The ONS house price index for March suggests that the housing market remains price sensitive, with average house prices now £8,000 below the recent peak in November 2022.
“On a regional basis, we are continuing to see lower value markets that are less constrained by affordability, such as the East Midlands (4.9%) and the North West (5.2%), outperform.”
She adds: “However, we are now also seeing confidence return to the South West (5.4%), home to typically higher value hotspots, which saw the overall highest annual percentage change.”
Jeremy Leaf, a north London estate agent and a former RICS residential chairman, said: “This most comprehensive of all the housing market surveys confirms what we have seen elsewhere, even though these figures are a little dated.
“Prices are up a bit or down a bit with no significant changes expected over the next few months.
“Buyers and sellers are finally shrugging off the worst effects of last September’s mini-Budget, with the market in a better place than it was at the end of last year.”
He added: “Confidence is slowly returning, particularly as inflation is beginning to fall and expectations grow that interest rates are at or near their peak.”
Nigel Purves, the co-founder and CEO of Wayhome, said: “We saw a turbulent finish to 2022 and a subdued start to this year where house prices are concerned, and this is further highlighted by the slower rate of house price growth seen in March.
“These cooling market conditions will be welcomed by those struggling to get on the housing ladder, however, house prices still remain some 4.1% higher than they were last year, and we are yet to see any inkling that a significant downturn is on the way.
“This means that the financial hurdle of a mortgage deposit remains considerably high, not to mention the fact that buyers are also facing far higher borrowing costs.”
Marc von Grundherr, a director of Benham and Reeves, said: “The figures further highlight the sluggish start to the year with respect to house price performance.
“However, things are certainly starting to improve, and it will take some time before an uplift in market activity filters through to an increase in the rate of house price growth.
“With inflation easing and mortgage rates expected to fall, we should see even more buyers enticed back to the market as we approach what is traditionally the busiest time of year.
“As a result, we can expect the slower rate of house price growth seen so far this year to kick up a gear as demand once again starts to exceed the supply of suitable homes on the market.”
Previous ArticleRenters Reform Bill and Anti-Social Behaviour