The Office for National Statistics (ONS) has reported that average UK house prices increased by 0.6% in the 12 months to July 2023, down from a revised 1.9% in June 2023.
The average UK house price was £290,000 in July 2023, which is £2,000 higher than 12 months ago, but £2,000 below the recent peak in November 2022.
Average house prices increased over the 12 months to July 2023, to £309,000 in England (0.6%), £192,000 in Scotland (0.1%), while average house prices in Wales decreased to £216,000 (negative 0.1%).
Average house prices increased by 2.7% to £174,000 in the year to Quarter 2 (Apr to June) 2023 in Northern Ireland.
The North East saw the highest annual percentage change of all English regions in the 12 months to July 2023 (2.7%), while the South West saw the lowest (negative 1.0%).
Tony Hall, head of business development at Saffron for Intermediaries, said: “Today’s figures are no surprise given the affordability challenges that exist in the market at present. However, the downward trend in house prices is far less significant than some analysts were predicting at the beginning of the year, and recent reductions in mortgage rates could stimulate increased activity in the market in the coming weeks and months. Scotland and parts of the North-West are also giving us reason to smile, with the housing market in these areas showing notable resilience through a challenging period.
“That being said, with interest rates likely to rise further before the end of the year, affordability will remain a key challenge for those looking to buy, or build, a home. The best approach for potential borrowers, particularly those who believe their financial circumstances might traditionally prohibit them from accessing the mortgage market, is to seek independent financial advice to find a product most suited to them. At Saffron, we place an emphasis on working closely with brokers to find solutions for customers that work, no matter what their circumstances may be.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, added: “Swap rates, which underpin the pricing of fixed-rate mortgages, have continued their decline in recent weeks after a period of extreme volatility. This is giving lenders the confidence to cut their mortgage rates, with a number making significant reductions and more expected to follow.
“The markets reacted favourably to the latest inflation data this morning, with five-year Swaps falling to 4.52% from 4.64% yesterday. While another base rate rise is expected, it is looking as though it is close to its peak, which will be welcome news for hard-pressed borrowers.
“There is a strong argument for the Bank of England to now pause rate rises in order to let the dust settle. Consecutive base rate rises have been painful; it’s time to let them take effect, rather than causing continued anxiety and distress for borrowers.”