UK House Price Growth Down For 10th Month In a Row

by | Tuesday 11th Jul 2023 | Mortgage News

New data released by E.surv in their June 2023 House Price Index confirms that UK house price growth has slowed again for the 10th month in a row. What does this mean exactly? And what can we expect from UK house prices moving forward. Is owning a property right now wise? Or should borrowers wait until the market returns to a more normal trend.

UK House Price Growth Data From E.surv

E.surv, a chartered surveyor service has released their latest UK house price index. This index is where E.surv list data recorded on property value trends and other property related data figures. For the last 10 months E.surv have reported that UK house growth has slowed, meaning that the value of property in the UK has not been increasing month on month like it normally would be expected to. Especially in places like London and the South West. So what are the figures that E.surv have released?

According to E.surv, on an annual basis, the average sale price of completed homes in England and Wales in June 2023 increased by £4,500, or 1.2%. Compared to previous figures, this is the lowest rate of increase since May 2020. It is also the tenth month in a row that the annual rate of price inflation has fallen. On a monthly basis, the average price of a property in the UK decreased in June 2023 by £970, or 0.3%, the third-largest monthly fall in prices of 2023.

Is It Worth Buying UK Property Right Now?

When you purchase a property, no matter how high your mortgage rate is or the value of the property, you are investing in your future. Yes, the property market is going through a tough period, but historically property has always bounced back. As one of the biggest investment asset you will ever own, your property will appreciate over time and the sooner you can buy, the better your future returns will look. Over 60% of homeowners in the UK consider their property to be their most valuable asset, and we are surprised that the percentage isn’t even higher.

One of the main rebuttals to this argument that we see frequently comes from private rental tenants and people still living with family at home who can afford to buy their first home but are unsure if they should. If you can live at home and save money then why not, right? Avoid paying out hundreds or thousands a month and just keep adding to your nest egg? What about if you can rent a property that you can freely move from when you like and avoid being tied into investing in a property with an expensive mortgage. Why not indeed?

Financial Gain From Property Price Bounce Back

The main issue with these two arguments is that while you are waiting, you aren’t gaining anything financially. You aren’t creating equity and investing in anything. In fact, the longer you wait, the more you are investing in your landlord’s property without any returns. And if you are living at home, the longer you wait to purchase, the more potential asset appreciation you are losing.

We are in a period where mortgage interest rates are higher than they have been for a number of years. Unfortunately, that is the reality that we are going to have to get used to. Mortgage rates will come down, but long gone are the days of rates of 1% or below. For landlords particularly, these rate rises will hit hard and will narrow their profit margins. Are landlords going to cover these extra costs themselves? Absolutely not. It will be the renters who will be worse off per month. So, investing in your own property and paying your own mortgage will always be more beneficial if you can afford to purchase.

What If Property Prices Drop Sharply?

But what if property prices drop significantly? Perhaps one of the biggest worries that every property owner has at some point or another. The simple answer is that if you aren’t planning on selling any time soon, then you don’t need to worry about it! As long as you aren’t hoping for a quick buy and flip job, then it doesn’t matter too much if your property goes down in value due to market conditions because it will come up again. Like any investment you might put money into, a property is a long-term investment and there will be ups and downs. But property value has always bounced back, and demand is always going to be high.

We as buyers, sellers, brokers, and lenders have a real storm to weather right now but things will get better. Property is a great asset to have and even if the market struggles, the right property advisors, and mortgage market advisors will be able to guide you and help you to invest your money in the most beneficial way possible.

Speak To a Mortgage Advisor About UK Property Prices

If you are considering purchasing a property, whether you will be a first time home buyer or selling your house and moving onto a new one, you need to discuss your options with a property expert like Oportfolio before you do anything. We will be able to run figures for you and give you help and guidance along the way, and will help you to find the best route forward for your circumstances. Contact our team for free today.

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If you have any questions about UK mortgage news or or anything you’ve read then please get in touch. We’d love to hear from you.

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