"Today’s figures further highlight the sluggish start to the year with respect to house price performance. However, things are certainly starting to improve and it will take some time before an uplift in market activity filters through to an increase in the rate of house price growth"
This morning's figures show that a typical UK home was priced at £285,000 in March 2023 - £11,000 higher than 12 months ago, but £8,000 below the recent peak in November 2022. On a seasonally adjusted basis, the average UK house price decreased by 0.9% in March 2023, following an increase of 0.4% in February 2023.
Regional performance
Average house prices increased over the 12 months to £304,000 (4.1%) in England, £214,000 in Wales (4.8%), £185,000 in Scotland (3.0%) and £172,000 in Northern Ireland (5.0%).
The South West saw the highest annual percentage change of all English regions in the 12 months to March 2023 (5.4%), while London saw the lowest (1.5%).
Nathan Emerson, Propertymark CEO, comments:
“In March we saw the total number of properties for sale edging back to pre-pandemic levels which was positively supported by an increase in market appraisals being undertaken.
“What we are now seeing is an interesting change in the property sales market as a fall in demand from buyers has allowed the number of homes available for sale to recover since the spike of activity seen during the pandemic. However, a steady level of transactions happening which is good news for the market and the wider economy.”
Paul Glynn, CEO of Air, comments:
“Recent economic forecasts reveal that interest rates on residential mortgages may now peak in September before starting to creep down as inflation eases. This suggests that current trends in house prices revealed by the latest ONS index are perhaps only a holding pattern until these larger economic changes begin to take effect toward the end of the year.
“However, affordability is likely to remain a key challenge for buyers of all ages with younger borrowers unable to take their first steps on the ladder and some existing borrowers facing the challenge of being trapped on their lender's soaring standard variable rate.
"While later life borrowing is not a silver bullet and the impact of any choices needs to be considered on a customer’s short as well as long-term finances, advisers seeking answers for their clients need to consider whether thinking outside the box may serve them well.
“Consumer Duty regulation will expect organisations to have referral relationships in place if they are unable to fulfil a customer’s needs themselves so now is the time to ensure these partnerships are in place.”
Jean Jameson, Chief Sales Officer at Foxtons, said: “The London housing market appears to be facing a better 2023 than initially predicted as renewed confidence ignites demand from buyers and investors. Our local offices are seeing an increasing appetite for London homes, with 17% more viewings booked year on year in April.
"This could be due to innovative products, such as Skipton Building Society’s “no-deposit mortgage”, which has enticed buyers to explore their options; or the steadying of mortgage rates supporting greater price alignment between buyers and sellers.”
Director of Benham and Reeves, Marc von Grundherr, commented:
“Today’s figures further highlight the sluggish start to the year with respect to house price performance.
"However, things are certainly starting to improve and it will take some time before an uplift in market activity filters through to an increase in the rate of house price growth.
"With inflation easing and mortgage rates expected to fall, we should see even more buyers enticed back to the market as we approach what is traditionally the busiest time of year.
"As a result, we can expect the slower rate of house price growth seen so far this year to kick up a gear as demand once again starts to exceed the supply of suitable homes on the market.
"We expect to see the sleeping giant of the London market start to awaken as the year progresses, having lay largely dormant during much of the pandemic market boom. We’ve seen strong interest from both domestic and international buyers during the early stages of 2023 and as this interest converts into sales, a boost in market activity should start to drive the capital’s property values skyward.”
