Average house prices decreased by 0.6% in the 12 months to January 2024, to £282,000, up from a decrease of 2.2% in the 12 months to December 2023.
In the 12 months to January 2024, average house prices decreased in England to £299,000 (-1.5%), in Wales to £213,000 (-0.8%), and increased in Scotland to £190,000 (+4.8%).
Average house prices increased by 1.4% to £178,000 in the year to Quarter 4 2023 in Northern Ireland.
On a non-seasonally adjusted basis, average house prices increased by 0.5% between December 2023 and January 2024, compared with a decrease of 1.1% during the same period 12 months ago.
Average UK private rent increased by 9.0% in the 12 months to February 2024, up from 8.5% in the 12 months to January 2024.
This represented the highest annual percentage change since this data series began in January 2015.
Reaction:
Jeremy Leaf, North London estate agent and a former RICS residential chairman:
“Lower inflation and the prospect of further falls has certainly fuelled housing market activity, if not prices so far this year.
“These figures are particularly interesting as they cover not only mortgaged but cash sales which alone account for over a third of the total, despite them being a little dated.
“However, the increase in listings and back-of-the-mind worries about the economy has meant the market remains sensitive and only competitively-priced stock is attracting attention.”
Anna Clare Harper, CEO of GreenResi:
“In nominal terms (before inflation), house prices are down by 0.6% annually in the year to January 2024, up 0.5% month on month.
“The chatter among many local agents is that house prices have ‘hit the bottom of the market’.
“House prices are relatively stable and grow in the medium to long term because of the fundamental shortage of supply, and growth in demand.
“A house price crash in the UK was, and is, unlikely, partly because pricing is anchored by the largest, luckiest group of owners: home owners with no mortgage (36% of the market).”
Richard Harrison, head of mortgages at Atom bank:
“There are signs that house price falls are starting to slow, with January’s figures from the Office for National Statistics (ONS) showing house prices fell by just 0.6% in the twelve months to January.
“Ongoing economic pressures and affordability constraints at the start of the year meant that buyer confidence did not fully return to the housing market.
“Looking ahead, while the jury is still out on whether we will see further house prices fall in Q2, the news last week that the UK economy returned to growth in January should in part help boost buyer confidence.
“News this morning that inflation is falling faster than expected will also be well received, increasing expectations of base rate cuts and lower mortgage rates.
“Affordability pressures remain however, with Moneyfacts figures showing that mortgage rates in March started to creep up again and the average shelf-life of a mortgage product dropped to just 15 days.
“As the mortgage market picks up pace, Atom bank remains committed to supporting brokers and their clients, with service remaining our key focus.”
Charlotte Nixon, mortgage expert at Quilter:
“There has been another small 0.6% decrease in UK house prices according to the latest government house price index.
“This is at odds to other indices which have shown house prices are now back on an upward trajectory showing that measuring the nation’s average house price and what is happening on the ground at any one time is not a fine art.
“What is clear though is the market has been notably quiet in recent months, and while we have certainly seen that apply downward pressure to prices it hasn’t so far translated into the crash that some were predicting when mortgage rates soared from their low levels.
“With inflation now under 4%, the murmurs of an interest rate cut will become louder as we head through the year.
“This will in turn help to reduce mortgage rates encouraging more buyers, perhaps scared off over the past couple of years, to start looking again.
“However, 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.
“This really tests buyer affordability and their ability to ride out uncertainty.
“Just recently rates have been on an upward trajectory again but whether this morning’s inflation figure changes this, only time will tell.
“These higher rates are having a real world impact that may result in further drops in house prices.
“According to consumer site Which?, missed payment rates among mortgage holders have returned to levels seen at the height of the cost of living crisis.
“In the month to March 8th, 8.1 per cent of mortgage holders missed essential payments such as housing, utility bill, credit card or loan payments.
“This could end up causing people to put their houses on the market as they simply can’t afford to keep up with payments.
“If a glut of houses turn up on the market with little demand then this could apply further pressure on house prices.
“Another period of more predictable rates for buyers coupled with a more optimistic outlook will help sellers feel confident they can get the deal they want for their property.
“Whichever way you look at it though the market is incredibly sensitive to the macro-economic data coming out at present and both buyers and sellers must feel prepared to negotiate on asking prices in either direction.”
Newspage reaction:
Stephen Perkins, managing director at Yellow Brick Mortgages:
“House prices are still in the red but it’s a slightly paler red than in the 12 months to the end of December.
“This data has a lag of several months or so but is starting to show signs of life in the property market.
“After the positive inflation news this morning, a first base rate cut may not be too far off and that could inject some much-needed momentum into the market.”
Craig Fish, director at Lodestone Mortgages & Protection:
“The Land Registry data lags behind real-time property market data by a number of months but this data at least shows an improvement.
“House prices have at the very least stabilised and I expect this to remain the same throughout 2024 with no real increase in values.
“We are certainly starting to see a build-up in enquiries from people looking to purchase and move home but there is hesitancy in decision-making because of higher interest rates.
“Following the fall in inflation to 3.4%, a cut to the base rate before the summer is now a very real possibility, which could see the property market take off.”
Austyn Johnson, founder at Mortgages For Actors:
“Though annual price growth is still negative, it’s less negative than it has been, and that’s a positive.
“Prices are definitely being supported by the ongoing lack of stock and supply.
“As we head into spring and summer, things should improve.
“This is the time of year when we typically see an uplift in purchase applications and the latest inflation data could add to the feel-good factor.”
Ross McMillan, owner at Blue Fish Mortgage Solutions:
“With 2024 now in full swing, Scotland’s housing market is maintaining the momentum of 2023.
“Demand continues to outpace supply, fuelling fierce competition and robust prices across the board.
“The market shows no sign of this pattern changing in the coming months.
“First-time buyers remain insatiable for properties below £200k and with higher interest rates now considered the norm, those aspiring for family homes are creeping out of the winter gloom early and bouncing into the traditional spring market.
“Even the buy-to-let sector, long beleaguered by Scottish government interventions, is showing some signs of revival as some of these restrictions are set to ease. It’s still early days but overall there is a note of optimism.
“Even if interest rates remaining stubbornly high despite the latest fall in inflation to 3.4%, it’s hard to now see a scenario where prices in Scotland don’t rise over the course of the rest of the year.”
