House prices fell 0.6 percent over the 12 months to the end of January, but the rate of decline has slowed sharply, according to official figures.
Office for National Statistics deputy director for prices Matt Corder said that while the cost of an average home in the UK dropped 0.6 percent to £282,000 on an annualised basis in January, it was an improvement on the revised 2.2 percent decline they saw over the course of 2023.
He also pointed out that although England and Wales have seen annualised property values fall since July, they have been rising in Scotland since November.
The average cost of an English home dropped 1.5 percent to £299,000, while in Wales they fall 0.8 percent to £213,000, and rose 4.8 percent to £190,000 in Scotland.
“Average UK house prices continued to fall, albeit at a slower annual rate than seen recently. Indeed, Scotland’s average house prices rose at their fastest annual rate for more than a year,” he said.
However, Quilter mortgage expert Charlotte Nixon warned that house prices could keep falling due to high rates putting pressure on the finances of mortgage holders. She said that if they are forced to sell because they cannot keep up with their repayments, the glut of houses on the market could depress prices.
“The chaos of mortgage rates in 2023 has put many would be buyers off. The mortgage market has suffered from incredible unpredictability with rates rising and falling rapidly and deals here today are gone tomorrow,” she said. “These higher rates are having a real world impact that may result in further drops in house prices.”
Additionally, the ONS’ data shows that annualised rent inflation in the UK has hit record levels. Over the 12 months to the end of February, the average rent increased nine percent, versus 8.5 percent for January. Monthly rents increased by 8.8 percent in England to £1,276 on average, nine percent to £793 in Wales and 10.9 percent to £944 in Scotland.
Economic growth campaign group Britain Remade founder Sam Richards said that rent is “simply out of control” and that more houses have to be built to bring them down and give young people the opportunity to own their own homes.
