In a recent report released by the Office for National Statistics (ONS), the average UK house prices experienced a modest increase of 1.7% in the year leading up to June 2023, signalling a potential shift in the dynamics of the property market. The data reveals a steady deceleration from the 1.8% rise recorded in May 2023, suggesting a more cautious approach among buyers and sellers alike driven by the cost of living crisis.
Average UK House Prices (ONS Official Statistics)
The current average UK house price now stands at £288,000, representing a £5,000 increment from the previous year. While this demonstrates a positive increase for people who currently own property, it is important to note that this figure remains £5,000 below the peak observed in November 2022 of £293,000. This indicates a potential ‘levelling off’ in the rapid price surges that we have previously seen in recent years.
Regional differences in prices continue to impact the landscape of the UK property market, as they always have done. Notably, the North East of England emerged as the frontrunner in terms of annual growth, recording a 4.7% increase to an average property price of £161,000 according to the ONS. In contrast, London experienced a slight 0.6% decline, causing the average property price to dip to £528,000. Despite this decline, London is still the most expensive region in the country, highlighting the demand for properties in the busy capital.
Why Might Property Value Increase Be Slowing?
There are lots of theories why this might be happening and it is difficult to pinpoint one in particular. Despite the pandemic being officially declared over by the UK government, COVID measures are still having an impact. Two years of lockdowns have made buyers reassess their housing preferences, with many people prioritising space, comfort, and flexibility over more restricted properties and areas such as London. Remote working has also led to an increased desire for larger homes and properties in suburban or rural settings, and people are leaning away from city living.
Of course, the uncertain economic landscape of the UK right now and concerns about potential interest rate hikes have led to a more cautious approach from homebuyers and buy-to-let investors. This hesitance has moderated the rapid price growth witnessed in previous months and may continue to influence the market in the foreseeable future.
Speak To a Mortgage Advisor About Property Prices
The latest data from the ONS paints a picture of a UK property market that is experiencing a slowdown in its rapid price growth. While the average house price has risen by a modest 1.7% to £288,000 in the year leading up to June, this growth rate is notably lower than the previous month’s 1.8% increase and is down significantly from last year’s figures. Regional differences in prices continue to influence the market.
These changes are reflective of evolving buyer preferences and a more cautious approach in response to economic struggles. If you are concerned about property prices or are optimistic about being able to afford a property at a lower than normal price, then please give our team a call or send us a message. We are here to help in any circumstance.