The housing market in England and Wales continues to see its growth rate decline, marking the tenth straight month of deceleration, according to the June House Price Index released by e.surv.
Despite this slowdown, the average house price remains £4,500 higher than a year ago. The North East leads the way in regional growth with a rate of 6.5%. Wales’ second-home council tax premium seems to be impacting prices, while London has returned to positive annual price growth.
The average house price in England and Wales now stands at £371,204, which is a 0.3% decrease from May but represents a 1.2% increase on an annual basis.
Richard Sexton, director at e.surv, said: “Given the growth in house prices over the last few years, our data, which includes cash purchases, shows a resilient picture. On an annual basis, the average sale price of completed home transactions in England and Wales in June 2023 rose by some £4,500, or 1.2%, and now stands at £371,204.”
Sexton highlighted the relevance of cash purchases in the current climate: “Cash purchases matter when borrowing costs are rising at such a rate.” However, he also noted concerns about supply: “There remains too little of the right kind of property and the reduction in expected house building figures over the coming months will do nothing to alleviate the lack of supply which continues to support prices.”
The impact of higher mortgage costs on housing prices is not surprising, according to Sexton. As the Bank of England continues its fight against inflation, the pressure on prices is expected to persist.
He said, “If we look at the data on a monthly basis, the average price dropped in June 2023 by some £970, or just -0.3%. This is the third-largest monthly fall in prices this year and the fifth in succession.”
Despite this monthly fall, Sexton is confident about the long-term prospects of the UK housing market. “But even this monthly fall does not reflect the strength of UK housing in the longer term as an asset group. Since March 2020 we calculate the rate of growth has been 18% and even accounting for inflation this is a strong performance,” he concluded.
