The latest ONS housing statistics for June 2023 indicate that average UK house prices grew by 1.7% over the past 12 months, marking a slight dip from the revised 1.8% growth reported in May 2023.
As of June this year, the average UK home was valued at £288,000. This represents an increase of £5,000 from the same period last year. Nonetheless, the current valuation lags behind by £5,000 from the peak seen in November 2022.
Analysing the figures by region shows that England witnessed an increase in the average house price to £306,000, marking a 1.9% growth from the previous year.
Meanwhile, in Wales, the average house price climbed to £213,000, registering a growth of 0.6%.
Northern Ireland’s housing market observed a substantial rise of 2.7%, setting the average house price at £174,000. In contrast, Scotland’s housing market remained relatively stable with the average house price standing unchanged at £189,000.
When examining individual English regions, the North East led the pack, experiencing a notable 4.7% annual growth. In stark contrast, London’s housing market took a downward turn, recording a decrease of 0.6% over the year.
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Sara Palmer, distribution director at The Mortgage Lender:
“For much of this year mortgage rates have been following the same upwards trajectory of the Bank of England’s base rate, however we could be seeing the start of a shift in the market.
“TML’s research found that some buyers are still planning to go ahead with their purchasing plans, even if it means making compromises along the way to mitigate against rate rises. Of those who are progressing with their homebuying decision despite high interest rates, 27% said they’re buying away from commuter towns for example, while another 24% said they’ll buy a cheaper property that needs renovation work. Others are compromising on outside space (21%) and property types (13%).
“First-time buyers could still be facing a significant affordability challenge but for those able to, flexibility is key for buyers still looking to go ahead with plans. Speaking to a broker early will ensure you are aware of all your options and are prepared for when you’re ready to buy.”
Malcolm Webb FRICS, technical director, Legal & General Surveying Services:
“Despite house price growth remaining subdued, there is good cause to remain optimistic about the outlook for the UK property market. It is always important to consider the full context of monthly price movement as a property is a long-term investment. The UK market has a track record of withstanding strong economic headwinds – the fact that swap rates and interest rates have remained relatively stable following the recent base rate rise is testament to this.
“Notwithstanding this, the UK property market is highly complex and different pockets are faring very differently. While equity-rich markets, such as prime central London, are well insulated against rising interest rates, affordability is being stretched for many aspiring homeowners outside of the capital.
“Buying a home is the biggest single purchase that most people will ever make, so getting a home survey is crucial to making a well-informed decision. Should a surveyor report any defects that could require expensive repairs, buyers can use the report as a renegotiation tool to ensure they are getting a fair asking price. A survey can also prevent an expensive problem, like damp, rearing its head later down the line.”
Conor Murphy, CEO and founder, Smartr365 and Capricorn Financial Consultancy:
“The latest house price data shows that there is still strong demand for UK property, despite wider economic challenges. The UK has avoided a recession and the initial signs suggest that inflation is starting to slow. New buyers are still looking to enter the market, despite a number of recent base rate rises from the Bank of England, and lenders are willing to lend, ensuring that prices in many areas remain stable.
“Although the market remains broadly healthy, the cost-of-living crisis still continues to impact buyers across the UK. Brokers need to acknowledge this, while dealing with a fast-moving market that’s still experiencing a great deal of product turnover. There is no silver bullet for these issues, but the integration of the right tech can help to both free up time for brokers and improve the overall efficiency of the mortgage process for consumers. Continuing investment in tech such as Open Banking, will create a better-functioning market for the future – something which will benefit both buyers and the advisers who support them.”
Ben Waugh, managing director at more2life:
“Given the ongoing affordability pinch in the mortgage market, today’s ONS data showing slight rises in house prices will be met by happy homeowners and disappointed younger demographics. The UK housing market has demonstrated its ability to weather substantial headwinds in the past and we’re seeing the same resilience here, even against consecutive rises in the base rate. the current outlook is shaded by the consecutive increases in the base rate, and the reduced supply is unlikely to help matters.
“Times are challenging for new buyers and remortgagers but there are still options to consider. Residential mortgage lenders are actively managing their products to support borrowers as best as they can, as are providers in the later life lending sector. While both propositions are different, the one adage that holds true is that potential borrowers need to consider their options early rather than waiting until they are under pressure.
“Whether you are looking to support a younger member of the family as they get onto the property ladder or determine how you refinance your own borrowing as you hit older age, later life lending products offer a variety of different choices and need to be carefully considered.”
Nathan Emerson, Propertymark CEO:
“The housing market remains strong for both buyers and sellers. Sellers are making a gain on their property price compared to this time last year, and buyers are still able to negotiate to find a middle ground.
“After positive inflation news has bought the potential for a peak in interest rates sooner than previously expected, there is also some hope that fixed mortgage rates will start to fall. Even as they remain high compared to recent standards.”
Emma Cox, MD of Real Estate at Shawbrook:
“A modest increase in house prices sees the market yet again defying expectations in the face of fluctuating rates, and a slowdown in activity. For real estate professionals, the current phase could be an opportune time to explore new possibilities.
“With the property market overall less busy, a reduction in competition from owner occupiers will create a favourable environment for landlords to consider expanding portfolios. With a robust demand in the rental market, landlords might consider diversifying into higher-yield options like Houses in Multiple Occupation (HMOs), which could in turn contribute to an increase in available properties for rent.”
Tomer Aboody, director of property lender MT Finance:
“Fewer transactions due to lack of confidence in recent months is reflective of the market and sentiment, with buyers and sellers sitting on their hands as they await some stability.
“Although transaction numbers might be rising, they’re still half of what they were this time last year.
“With inflation heading in the right direction, helping the Government’s commitment to halve it by the end of the year, confidence should improve. Hopefully, an end to interest rate rises is also in sight, which will give borrowers a much-needed boost.”
Mark Harris, chief executive of mortgage broker SPF Private Clients:
“Swap rates, which underpin the pricing of fixed-rate mortgages, have been much calmer in recent weeks after a period of extreme volatility, giving lenders the confidence to start reducing their mortgage rates.
“The markets reacted broadly favourably to the latest inflation data this morning, with five-year Swaps falling to 5.01% from 5.07% yesterday. If Swaps continue to move in this direction, other lenders may well reduce their mortgage rates, which will be welcome news for hard-pressed borrowers.
“While base rate is expected to peak at around 5.75-6% with another rate rise next month, there is a strong argument for the Bank of England to then pause rate rises to let the dust settle. Consecutive base rate rises have been painful; it’s time to let them take effect, rather than causing continued anxiety and distress for borrowers.”
Nicky Stevenson, managing director at national estate agent group Fine & Country:
“House price growth is cooling, but today’s fall in inflation sparks hopes that the economy is turning a corner, and bolsters the chances of the property market experiencing a soft landing.
“The biggest barrier to sales is the cost of mortgages, but competition for borrowers has seen lenders drop rates in recent days, which may trigger another flurry of activity.
“The Bank of England may also be nearing the point where it presses pause on further base rate hikes, which would bring greater stability to mortgages and, in turn, promote more confidence in the property market.
“The resilience of the housing market can partly be attributed to a pool of motivated buyers who continue to bid for reasonably priced properties.
“Smaller homes in affordable locations close to major employment hotspots remain the most popular properties. Buyers are also searching for homes that have been sensibly priced, and these continue to attract a number of offers.”
Rich Horner, head of individual protection at MetLife:
“House prices are now on the rise, demonstrating momentum in the market once again. While previously rate hikes caused buyers to sit tight and await a more stable market, it seems like some have decided it’s time to bite the bullet and take advantage of a few of the UK’s largest lenders cutting mortgage rates.
“However, high interest rates, mean new mortgages are more expensive. And with asking prices not falling far enough to balance this out, it’s important buyers are thinking about how they can affordably protect themselves against meeting these monthly repayments. Ensuring you have adequate protection for your mortgage and home will give far greater peace of mind should an accident or illness prevent you from working, potentially putting your monthly repayments at risk.”
Emma Hollingworth, managing director of Mortgages at MPowered Mortgages:
“Despite the slight decline in today’s figures, the housing market is showing renewed signs of resilience. With mortgage rates having fallen in recent weeks, and private sector pay growing at record levels, a dramatic fall in house prices is looking more and more unlikely. We can also expect inflation to fall further, allowing first-time buyers to increase the amount of money they can affordably borrow.
“Typically, August can be a slow period for the housing market, and affordability will remain a barrier for many would-be homeowners in the coming months, but given more lenders are continuing to reduce rates we can expect a strong finish to the year. Consumers looking to remortgage, or take that first step onto the property ladder, should always be seeking independent financial advice to work out how they can best achieve their homeownership goals.
“At MPowered we are committed to keeping rates as affordable as possible in the current climate, allowing more buyers to achieve their dream home. Using our innovative AI solution to speed up the mortgage process, we can provide buyers almost instant decisions, giving them increased certainty and control in the mortgage journey.”
Ross Boyd, CEO at Dashly.com:
“This latest house price data shows the complete reversal in momentum in the property market compared to a year ago. Summer 2022 feels like an age ago compared to where we are at now. Significantly higher mortgage rates have torpedoed the property market.
“London, based on this evidence, has been the hardest hit. With core inflation remaining sticky, another base rate hike is now likely, so the downward pressure on house prices looks set to continue throughout 2023.
Lewis Shaw, owner and mortgage expert at Shaw Financial Services:
“It’s written in the stars that house prices are declining and will continue for some time yet. Don’t be misled by the data about price rises in certain areas. This is mainly due to the lag between agreeing to buy a property at a particular price and when the transaction completes and is reported at the Land Registry, which is massively behind the curve.
“For example, the figures for June 2023 are based on sales agreed upon in February and March. We also know that the actual peak of house prices was August 2022; once again, the lag comes into play. Until the Land Registry can update the way they work and reduce the lag to weeks rather than months, the data is somewhat meaningless.”
Jamie Lennox, director at Dimora Mortgages:
“The concern around this data is that it has such a huge lag on what is going on in the trenches of the housing market, With the average purchase transaction taking 3-4 months, these purchases will have originally been agreed when mortgage pricing was on a downward trend. With the base rate jumping dramatically since then, we are likely to see less favourable figures in the months to come.”
Samuel Mather-Holgate, independent financial advisor at Mather and Murray Financial:
“With regular depressing economic data hitting the headlines, it’s no surprise that house prices are stagnant. The capital, with the highest house prices in the UK, has been hardest hit and there will be more pain to come as recent interest rate increases haven’t taken effect in these figures. With inflation falling significantly today it’s possible the central bank might pivot on rates towards the end of the year, but there will have been a deep correction of up to 20% in prices if they delay further than that.”
Riz Malik, founder & director at R3 Mortgages:
“The data reveals unexpected resilience in the housing sector, as the housing market will continue to be supported due to the provisions in the Mortgage Charter. London, with its higher average prices, unsurprisingly seems to bear the most impact. This picture does not reflect what we are seeing on the ground and the results in the coming months may not be as positive.”
Justin Moy, managing director at EHF Mortgages:
“Some of the trends highlighted are a little misleading, as average prices might just reflect a different subset of properties sold during the reporting period, and doesn’t indicate any activity numbers, just prices.
“This data is also some months behind the actual position in August, given we are some 2% more expensive for mortgage rates between April and August. As an overall assessment though it shows just how quickly our property market has slowed down, and the challenge on prices throughout the UK, and we are still at the beginning of the mortgage rate challenges and the effect of base rate increases.”
Ranald Mitchell, director at Charwin Private Clients:
“The UK property market is resilient and this data shows that. Average UK house prices remain £5,000 higher year on year, but slightly lower than the peak in November 2022. This is during a period where rates have surged and costs of borrowing spiked. Regional fluctuations are normal and it is no surprise to see growth of 4.7% in the North East, with many buy-to-let investors turning their attention there. Q4 data will be telling, as we continue to look over our shoulders at what’s just happened in the mortgage and property market.”
