House prices are officially STILL rising (but only just): ONS reports annual growth of 0.2%

House prices are officially still rising, with the ONS revealing that average sales prices rose by 0.2 per cent in the 12 months to August.

The average house price was £291,000 in August 2023, little change from 12 months ago but £9,000 above the recent low point in March 2023.

While sales prices remain in positive territory, property price growth has slowed since July last year, when prices rose a massive 13.8 percent.

And rising: The average house price was £291,000 in August 2023, little changed compared to 12 months ago, according to ONS data

There are also slight differences depending on where people live in the UK.

House prices in England remained unchanged at £310,000 in the 12 months to August. Meanwhile, typical prices in Wales fell 0.1 per cent to £217,000 and rose 1.1 per cent to £194,000 in Scotland.

The North East recorded the highest annual percentage change of any English region in the 12 months to August 2023, rising 3.6 per cent, while the East of England fell 1.6 per cent.

Will property prices start to fall?

All leading indicators point to property prices falling.

Separate house price indices from Nationwide and Halifax report that house prices have already started to fall.

These relate to their own approved mortgage applications and are therefore slightly higher than the ONS sales figures. However, they do not include cash buyers or mortgage details from other lenders.

National data shows house prices fell 5.3 per cent in the 12 months to September, while Halifax says prices fell 4.7 per cent in the period.

The latest survey from the Royal Institution of Chartered Surveyors (Rics), which conducts a monthly survey of Rics estate agents, provides an overview of what is currently happening locally in the property market.

House price rise: ONS data shows prices are officially still rising, rising by an average of 0.2% in the 12 months to August

The vast majority of respondents in recent months said property prices were falling.

And earlier this week Rightmove reported that newly listed asking prices rose 0.5 per cent in October compared to the previous month. That sounds positive until you consider that it was the smallest October increase since 2008.

Based on the last 20 years, the average asking price increase in October is 1.4 percent, according to Rightmove.

Richard Harrison, head of mortgages at Atom Bank, expects house prices to fall further due to higher mortgage rates.

He said: “Prices continue to rise at a slower pace, with today’s data reflecting the difficult period the property market has experienced so far in 2023, as rising interest rates have a negative impact on buyers’ borrowing abilities and customer confidence.”

Average house price: While sales prices remain in positive territory, house price growth has been slowing since July last year, when annual prices rose 13.8%.

“However, there is reason for cautious optimism.” Falling prices represent an opportunity for first-time buyers and many experts now believe the base rate has peaked as overall mortgage prices have fallen over the last 12 weeks.

“This is unlikely to trigger an immediate dramatic increase in activity and prices, but it does reduce the potential for a larger price decline, as previously speculated by some commentators.”

Jeremy Leaf, north London estate agent and former chief executive of Rics Residential, added: “These slightly historical figures are more comprehensive than other surveys as they are based on completions rather than offers and include all sales including cash and mortgages.”

“They demonstrate resilience at a time of great market turmoil due to rising mortgage rates.

“The market remains price sensitive, although stabilization in inflation and mortgage rates as well as increases in real wages have improved affordability and led to more viewings and offers, particularly for small single-family homes.”

“Very few forced sales and low inventory levels mean prices are more likely to fall further rather than undergo a significant correction.”