While house prices are slowing, average prices are still increasing on an annual basis in most areas of England and Wales, according to data from e.surv’s January House Price Index.
On an annual basis house prices recorded for completed transactions in England and Wales increased in January 2023 by some £21,300, or 6.0%.
This is 1.1% lower than the 7.1% seen in December, and represents the fifth month in succession in which the annual rate of growth has slowed – a sustained downturn.
However, even if the rate of price growth is slowing, prices are still increasing, and the current average price of £378,277 thus sets a new record level for England and Wales as a whole.
Richard Sexton, director at e.surv, said: “Our data this month shows a slowing rate of growth, which will surprise no-one but nevertheless there is still modest growth, which is positive.
“It’s our view that while other commentators are comparatively downbeat about the future of the housing market, they are focused on specific elements.
“Mortgage borrowers, for example, are enduring significant increases in the cost of borrowing and this is curtailing their activity but since our index covers cash and mortgage transactions it does give a slightly different picture of what has been going on.
“Cash is a significant factor in some key housing markets.”
The research found that since last month, the rate of change in the growth of house prices has diminished across all areas.
The largest fall in the rate of price growth was in the North East, down 3.8% from 12.1% to 8.3%, followed by the North West, down 3.6% from 12.8% to 9.2%.
The area with the lowest reduction in prices was Greater London, where price growth fell by just 0.3%, from 0.9% to 0.6%.
The East and West Midlands remain the top two regions (the same as last month), in terms of having the highest annual rates of price growth, at 11.0% and 10.3% respectively.
In the East Midlands, six of its 10 constituent unitary authority areas have price growth in excess of 10.0%, with the City of Nottingham setting the highest rate of annual growth in England at 23.7%.
The West Midlands region is in second place, a position it has held for the last six months, with the West Midlands unitary authority (which includes Birmingham) being its prime performer, having annual price growth at +13.8%.
By contrast, Greater London has the lowest annual growth rate of just +0.6%, although 19 of the 33 London boroughs saw prices rise on an annual basis (two less than last month).
Broadly, the most expensive inner-city areas recorded falling values – impacting seven of the top ten boroughs ranked by price.
For example, in the City of Westminster – which is ranked in second place in London in terms of its average value – house prices have fallen by -31.7% over the last twelve months, while in Kensington and Chelsea – the most expensive borough in London – prices fell by -12.8% over the same period. Meanwhile, 14 of the 16 lowest-priced London boroughs have seen their prices rise over the last 12 months, with Hounslow having the highest increase of this group, at 15.8%.
Wales has risen back up to third place, having held first position for eleven months from July 2021 to May 2022 before falling down the rankings.
21 of the 22 local authority areas in Wales are currently experiencing an increase in prices over the last 12 months, with only Pembrokeshire having a fall.
Similarly, 10 of these 22 are currently at record price levels: this is perhaps surprising, given that prices were rising faster than in any English region during the first five months of 2022, and one might have thought that values would have started to falter after such a long period of high growth.
Sexton added: “As a result of looking at whole of market activity rather than mortgaged transactions we can see that prices in January increased by £270, or 0.1%, which although very small is still positive.
“Indeed, we know that other sources too are suggesting things are slightly better than might otherwise be thought from the slew of negative headlines that have accompanied recent announcements.
“There is a wild variety of predictions with regard to property prices at the moment, but we err on the side of caution for now as the data suggests markets may be more robust than many suspect.
He continued: “What the data does tell us is that as an investment class of its own, property continues to perform well. Since the start of the pandemic in March 2020, prices to December 2022 have risen by some £65,500, or 21.0%, which contrasts with the increase in consumer price inflation (including housing – CPIH) of 15.4% over the same period.”
