Annual house price growth slows amid record jumps in rental prices

News at John Hoole | 04/10/2023

Annual house price growth in July 2022 was 23 times the rate of growth seen in the same month this year, according to official figures.

Average UK house prices increased by 0.6% annually in July 2023, slowing from 1.9% in June 2023, according to the Office for National Statistics (ONS).

Back in July 2022, annual house price inflation was running at 13.8% – 23 times the 0.6% rate of growth in July 2023.

The average UK house price in July 2023 was £290,000.

While this was £2,000 higher than 12 months earlier, it was also £2,000 below a recent peak seen in November 2022.

On a seasonally adjusted basis, the average UK house price decreased by 0.5% in July 2023, following a month-on-month increase of 0.7% in June 2023.

Average house prices increased over the 12 months to July 2023 to £309,000 in England (a 0.6% annual increase) and £192,000 in Scotland (0.1%), while average house prices in Wales decreased to £216,000 (down by 0.1%).

In Northern Ireland, property values increased by 2.7% annually to £174,000 in the second quarter of 2023.

Within England, the North East recorded the highest annual percentage house price increase in July at 2.7%, while the South West recorded the weakest growth, with house prices falling by 1.0%.

London’s average house prices remain the most expensive of any region in the UK, with an average price of £534,000. Average house prices in London fell by 0.8% annually in July.

The surprise easing of CPI will be closely watched by the Bank of England’s policymakers, who are meeting this week to decide whether to push through another interest rate hike.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “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.”