In the 12 months leading up to May 2023, the UK property market experienced a moderate increase in average house prices, according to the latest data released by The Office for National Statistics (ONS). The report indicates that the average house price across the UK rose by 1.9% during this period, which is a notable decline from the revised 3.2% increase recorded in April 2023.
Regional Variations In the UK Property Market
As of May 2023, the average house price in the UK reached £286,000, marking a £6,000 increase from the figures reported 12 months earlier. While this growth arguably shows steady progress in the UK property market, it remains £7,000 below the peak price seen back in September 2022. Looking more closely at the data released by the ONS, there are some interesting figures from the regional variations within the UK. England saw average house prices rise to £304,000, representing a modest increase of 1.7% in the 12-month period. Of course this figure is fuelled a lot by high property prices in London and the South West.
Wales also saw a growth rate of 1.8%, with the average house price reaching £213,000. In Scotland, the property market showed a much more impressive increase, with average house prices increasing by 3.2% to reach £193,000. Northern Ireland beat this however, showing an increase of 5% with the average house price reaching £172,000. Among the different English regions, the North East actually showed the highest annual change, recording a 4% increase in house prices over the 12-month period. In contrast, the East region recorded the lowest growth rate, with prices staying at the same level as 12-months previously.
What Do Property Experts Say?
Industry experts suggest that the slowing down of the annual price increase could be for a number of reasons, not just lack of buyer interest. One significant factor is the ongoing impact of the global economic recovery following the challenges posed by the COVID-19 pandemic. Additionally, potential buyers might be exercising caution amidst uncertainty in the financial markets and inflationary pressures, leading to a more subdued demand for properties. Of course, increased interest rates over the last few months has clearly deterred many people from purchasing until rates come back down.
Despite the reduced pace of annual price growth, in our Opinion, the property market in the UK continues to show resilience, and the overall outlook is positive. Despite being a small increase, the 1.9% increase in average house prices suggests stable growth in the UK property market, with property remaining an attractive investment option for homeowners and investors alike. Especially in areas like London, where investment in property is still very favourable. As we get further into 2023, property experts anticipate that the market could maintain its current trajectory or potentially experience a slight uptick as the economy continues to recover and regain its footing. This week it was announced that UK inflation has dropped to the lowest level that it has been in 16-years, signalling that the economy is hopefully recovering quicker than anticipated.
Speak To a Mortgage Advisor About Property Investment
If you are thinking of buying a home to live in or a property to rent out, and you need to secure a mortgage, you should always contact a mortgage advisor. The UK property market and the UK mortgage market are both very difficult places to navigate through right now, and going it alone is not a good idea. With the help of professional property experts like Oportfolio, you can get the best advice and guidance available.