The Office for National Statistics (ONS) has revealed that average UK house prices increased by 1.9% in the 12 months to May 2023, down from a revised 3.2% in April 2023.
The average UK house price was £286,000 in May 2023, which is £6,000 higher than 12 months ago, but £7,000 below the recent peak in September 2022.
Average house prices increased over the 12 months to May 2023, to £304,000 in England (1.7%), £213,000 in Wales (1.8%), £193,000 in Scotland (3.2%) and £172,000 in Northern Ireland (5.0%).
The North East saw the highest annual percentage change of all English regions in the 12 months to May 2023 (4.0%), while the East saw the lowest (0.0%).
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “This most comprehensive yet historic house price survey shows clearly the impact of stubbornly high inflation on mortgage rates and the knock-on effect on confidence which is keeping house prices in check.
“On the ground, appetite remains but worries over how far and how fast repayments will rise is highly relevant. Meanwhile, many sellers are not prepared to reduce to what is clearly a new market ’norm’.
“Better-than-expected inflation news is welcome, particularly if the figures can be sustained over the next few months. However, the fall may not be enough to stop further albeit modest interest rate rises in the near future.”
Malcolm Webb, technical director at Legal & General Surveying Services, added: “It may seem that the UK housing market has entered a turning point. However, considering the full context of these price variations is important. UK house prices have enjoyed decades of growth, reaching all-time highs during the immediate post-pandemic period. As such, any drop in house prices seen today should be considered something more of a levelling out in asking prices.
“The reality is that there’s still a sizeable discrepancy between available housing supply and market demand, keeping upwards pressure on prices – especially in certain areas of the UK. Nevertheless, we should remember that house prices can vary significantly by region, so homeowners should always seek advice from a local expert to scope out their available options.
“While the cost-of-living crisis and high house prices have created ongoing affordability challenges for would-be buyers, there are still good options available, with some prospective buyers shifting their attention to smaller homes instead. For would-be borrowers in this position, getting a home survey is key to making a well-informed decision. Should a surveyor report any defects that could require expensive repairs, buyers can use the report as a renegotiation tool and ensure they really are getting a fair asking price.”
