UK Housing Price Index - Central Housing Group

Pockets of Strength in Latest UK Housing Price Index

According to the latest UK Housing Price Index, the annual percentage change for average UK house prices was 5.5% in the 12 months to February 2023, compared with 6.5% in the 12 months to January 2023 and 9.0% in the 12 months to December 2022.

The average UK house price was £288,000 in February 2023, which is £16,000 higher than 12 months ago, but £5,000 below the recent peak in November 2022.

Average house prices increased over the 12 months to £308,000 (6.0%) in England, to £215,000 in Wales (6.4%), to £180,000 in Scotland (1.0%) and to £175,000 in Northern Ireland (10.2%).

On a non-seasonally adjusted basis, average UK house prices decreased by 1.0% between January 2023 and February 2023, while average UK house prices decreased by 0.1% during the same period 12 months ago. This caused the UK annual inflation rate to slow this month.

Annual house price inflation was highest in the West Midlands where prices increased by 8.6% in the 12 months to February 2023.

London was the English region with the lowest annual growth, where prices increased by 2.9% in the 12 months to February 2023.

 

However, Scotland saw lower annual inflation than London, with prices increasing by 1.0% in the 12 months to February 2023.

The Royal Institution of Chartered Surveyors’ (RICS’) February 2023 UK Residential Market Survey reported a decline in demand and represents the tenth consecutive negative monthly reading for new buyer enquiries.

However, the results of the UK Housing Price Index also show that it is also the least negative result since July of last year.

The Bank of England’s Agents summary of business conditions 2023 Q1 reported a modest pick-up in secondary market activity and requests for valuations, but said that demand was broadly equal to the supply of properties available.

The UK Property Transactions Statistics showed that in February 2023, on a seasonally adjusted basis, the estimated number of transactions of residential properties with a value of £40,000 or greater was 90,340.

This is 18.2% lower than 12 months ago (February 2022). Between January 2023 and February 2023, UK transactions decreased by 4.1% on a seasonally adjusted basis.

The Bank of England’s Money and Credit February 2023 release reported that mortgage approvals for house purchases, an indicator of future borrowing, increased to 43,500 in February 2023, from 39,600 in January 2023.

This marked the first monthly increase since August 2022.

England

In England, the February data shows that, on average, house prices have fallen 0.8% since January 2023. The annual price rise of 6.0% takes the average property value to £308,365.

The regional Housing Price Index data for England indicates that:

  • every region experienced negative growth except Yorkshire and the Humber, where there was 0.0% change in house prices
  • the North East saw the most significant monthly price fall, with a movement of –2.3%
  • the West Midlands experienced the greatest annual price rise, up by 8.6%
  • London saw the lowest annual price growth, with an increase of 2.9%

Price change by region for England

Region Average price February 2023 Annual change % since February 2022 Monthly change % since January 2023
East Midlands £249,751 7.4 -1.1
East of England £357,697 5.6 -0.1
London £532,212 2.9 -1.1
North East £159,980 7.6 -2.3
North West £214,146 7.0 -0.6
South East £395,571 5.8 -1.2
South West £326,616 5.8 -1.2
West Midlands £253,921 8.6 -0.4
Yorkshire and the Humber £207,220 5.5 0.0

Repossession sales by volume for England

The lowest number of repossession sales in December 2022 was in the East of England.

The highest number of repossession sales in December 2022 was in the North West.

Repossession sales December 2022
East Midlands 5
East of England 1
London 9
North East 15
North West 35
South East 11
South West 11
West Midlands 8
Yorkshire and the Humber 12
England 107

Average price by property type for England

Property type February 2023 February 2022 Difference %
Detached £491,142 £455,656 7.8
Semi-detached £294,671 £277,381 6.2
Terraced £250,516 £236,531 5.9
Flat/maisonette £251,420 £244,329 2.9
All £308,365 £290,774 6.0

Funding and buyer status for England

Transaction type Average price February 2023 Annual price change % since February 2022 Monthly price change % since January 2023
Cash £288,736 5.7 -0.8
Mortgage £318,140 6.2 -0.8
First-time buyer £255,170 5.5 -0.8
Former owner occupier £354,497 6.4 -0.8

Building status for England

Building status Average price December 2022 Annual price change % since December 2021 Monthly price change % since November 2022
New build £430,229 25.5 0.0
Existing resold property £305,604 8.2 -0.1

London

London shows, on average, house prices have fallen 1.1% since January 2023.

An annual price rise of 2.9% takes the average property value to £532,212.

Average price by property type for London

Property type February 2023 February 2022 Difference %
Detached £1,101,076 £1,048,655 5.0
Semi-detached £692,737 £662,038 4.6
Terraced £579,084 £557,962 3.8
Flat/maisonette £441,607 £435,531 1.4
All £532,212 £516,986 2.9

Funding and buyer status for London

Transaction typeAverage price February 2023Annual price change % since February 2022Monthly price change % since January 2023Cash£550,7562.3-0.8Mortgage £525,8913.1-1.2First-time buyer £458,0382.5-1.0Former owner occupier £613,4473.4-1.2

Building status for London

Building status Average price December 2022Annual price change % since December 2021 Monthly price change % since November 2022 New build £596,44920.80.8 Existing resold property £534,1404.1-0.4

Wales

Wales shows, on average, house prices have fallen by 0.6% since January 2023.

An annual price rise of 6.4% takes the average property value to £215,343.

There were 6 repossession sales for Wales in December 2022.

Average price by property type for Wales

Property type February 2023 February 2022 Difference %
Detached £334,546 £310,989 7.6
Semi-detached £207,857 £195,882 6.1
Terraced £167,081 £157,282 6.2
Flat/maisonette £134,557 £131,396 2.4
All £215,343 £202,482 6.4

Funding and buyer status for Wales

Transaction type Average price February 2023 Annual price change % since February 2022 Monthly price change % since January 2023
Cash £207,789 5.6 -0.6
Mortgage £219,694 6.7 -0.6
First-time buyer £184,529 5.9 -0.9
Former owner occupier £251,872 6.8 -0.3

Building status for Wales

Building status Average price December 2022 Annual price change % since December 2021 Monthly price change % since November 2022
New build £331,623 28.8 0.5
Existing resold property £216,528 9.2 0.6

Jeremy Leaf, north London estate agent and a former RICS residential chairman, comments:

“Despite another small fall in prices month-on-month, the housing market is proving to be resilient.

These are the most comprehensive of all housing surveys but the figures are a little dated, inevitably reporting on activity from a few months earlier when the market was in the doldrums.

Since then, confidence has slowly improved in response to more choice and stabilising mortgage, if not base, rates.

However, worries about inflation persist and buyers want to see value so are flexing their muscles before making decisions.”

Tomer Aboody, director of property lender MT Finance, comments:

“Fewer properties for sale tends to result in higher property prices, which seems to have been the case over the past year or so, with demand in the regions and for houses particularly strong.

With mortgage rates fluctuating, particularly towards the end of last year, many buyers stalled, which meant a reduction in the number of transactions.

Hopefully, as inflation falls and rates continue to stabilise, we will see more sales proceeding as buyers return and get their purchases back on track.”

Alex Lyle, director of Richmond estate agency Antony Roberts, comments:

“February seems a long time ago now and the market moves on apace – over the Easter break we have had plenty of new enquiries with busy diaries this week and the weekend ahead.

Now that the sun’s coming out, the housing market appears to be picking up accordingly.

There is no single housing market with regional differences and variations within regions.

Quality houses with desirable addresses continue to be well received by buyers, who are meeting, if not exceeding, asking prices. We are finding that prices in the £1.5m-plus family home market are holding well, with 98 per cent of the asking price on average being achieved in the first quarter of this year.

The market for flats is not proving as strong as houses, with prices more sensitive due to less demand.

It is essential that vendors price correctly and are not overly optimistic if they are to achieve a successful sale.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, comments:

“The fall in inflation is welcome and means it is increasingly likely that base rate is near its peak.

Despite the continued high cost of living, green shoots and resilience in the housing market are evident.

Lenders expect tightening credit lines over the next three to six months but no credit crunch.

Pricing on new mortgages continues to trend downwards, providing welcome relief for borrowers, although the rate of falls is slowing.

Borrowers who are unsure whether to take a product now or wait in the hope of cheaper rates in the future should seek advice from a whole-of-market broker.”

Managing Director of Barrows and Forrester, James Forrester, comments:

“The housing market is incredibly diverse and while there are certainly some areas where house prices have reduced notably of late, there are many pockets where the market has gone from strength to strength with little signs of slowing.

Those considering a property purchase or sale would do well to ignore topline market statistics and the headlines they yield and instead focus on the performance of your local market when ascertaining just what price point to sell at, or to make an offer.”

Managing Director of House Buyer Bureau, Chris Hodgkinson, comments on the findings of the UK Housing Price Index:

“The property market has remained resolute for the large part and while house prices have softened, we certainly aren’t seeing a drastic downturn by any means.

However, what we are seeing is a far greater level of market instability during the transactional process itself, with buyers and sellers being subjected to a greater degree of down valuations, chain-breaks and sales collapsing.”

CEO of Alliance Fund, Iain Crawford, comments on the findings of the UK Housing Price Index:

“So far this year we’ve seen a sustained appetite for new homes from the nation’s homebuyers, with new-build house prices generally moving against the wider grain of a cooling market.

While there may be a pause for breath following the final Help to Buy deadline, we expect the new homes sector to shift through the gears as the year progresses, helping to keep the overall market afloat in the process.”

Co-founder and CEO of Wayhome, Nigel Purves, comments on the findings of the UK Housing Price Index:

“A marginal reduction in the cost of homeownership will be warmly welcomed by those who have been firmly priced out of the market during the pandemic house price boom.

However, the unfortunate reality is that despite the recent drop in house prices, homeownership remains far beyond the reach of many aspirational buyers, who simply can’t afford the sky high costs associated with getting onto the property ladder.

This issue has only worsened as the cost of borrowing has climbed in line with interest rates and we expect this additional financial pressure to further dampen market sentiment going forward.”

Jason Ferrando, CEO of easyMoney comments on the findings of the UK Housing Price Index:

“Higher interest rates have led to a more subdued level of mortgage market activity so far this year, which in turn, has caused the rate of house price appreciation to ease as the nation’s homebuyers tread more tentatively.

We expect this air of caution to remain as the Bank of England is expected to increase interest rates for the twelfth consecutive time in a row come next month, however, the market should continue to stand firm.”

Director of Benham and Reeves, Marc von Grundherr, comments on the findings of the UK Housing Price Index:

“Higher interest rates have dampened the appetites of the nation’s homebuyers in recent months and so we’re no longer seeing the same feeding frenzy with respect to demand and supply imbalance of the market.

As a result, buyers simply aren’t having to offer over the odds to secure their desired property and nor are they willing to, given the higher cost of borrowing.

This has caused house prices to normalise but we’re yet to see any notable reduction as sellers continue to secure a fair price in current market conditions.”

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