Land Registry: House prices defy economic reality and rise by £17,000 in a year
House prices are defying economic reality as the average house rises by £17,000 in a year, Land Registry data shows, but house inflation is slowing
- The average house price in the UK is now £290,000
- The growth rate decreased from December 2022 when it was 9.3%
House prices continue to defy economic reality, with the average house rising by £17,000 a year, according to the government’s latest House Price Index.
The rise brings the average house price in the UK to £290,000, despite continued pressure from both high inflation and higher mortgage rates, which are hurting homebuyers’ spending power.
The annual rate of housing inflation was 6.3 percent in January, according to the ONS/Land Registry report, but growth has slowed significantly.
In December, home price inflation for 2023 was 9.3 percent, while the report showed house prices fell 1.1 percent in January.
The ONS report, based on Land Registry transaction sales data, lags other home price indices, with major mortgage lender Nationwide reporting home values fell 1.1 percent in the year to February.
House prices rose in January, but the growth rate slowed compared to previous months
Renters’ costs have also risen as prices for renters across the UK rose 4.7 per cent in the 12 months to February, according to the Office for National Statistics.
UK private rental prices started to rise in the second half of 2021, with annual growth in all regions except London, where prices fell, according to the ONS.
The annual percentage change in rents increased in all regions including London in 2022 and continued into early 2023.
In its February insight report, the Association of Residential Letting Agents said the rental market remains very unbalanced as demand continues to outweigh supply.
Pressure on rents has eased slightly since last summer’s highs, but has by no means gone.
Rental rates rose 4.7% for the year to February, increasing pressure on tenants
Is the real estate market slowing down… or picking up?
Housing market activity also slowed at the beginning of the year. In January, the estimated number of residential real estate transactions was 96,650, around 10.6 percent less than 12 months ago.
Mortgage approvals for home purchases also declined in January, the fifth straight monthly decline in mortgage approvals for home purchases.
But real estate agents claim the housing market has recovered from its ailing state late last year, with buyers adjusting to higher mortgage costs and being helped by interest rates, which peaked after Kwasi Kwarteng’s ill-fated mini-budget.
Tom Bill, Head of UK Residential Research at Knight Frank, said: “The fall in annual house price growth in January tells us a lot about the adverse impact of the mini-budget but very little about how the UK property market will perform this year.
‘Following the effective shutdown for the final quarter of 2022, demand and supply have been solid this year and sales volumes will eventually catch up against an economic backdrop that is proving stronger than expected.
“This will not be the final mismatch between weak historical data and stronger reality today.”
Uptrend: According to Rightmove, the average asking price in London is up 2 percent since the beginning of the year
Rightmove said it was raising prices in what it saw as a “cautious sign of recovery,” with the average newly listed home up 3 percent over the past year.
The typical asking price rose by £2,906 to £365,357 in the year to mid-March as the market showed “cautious signs of recovery” following the mini-budget turmoil in late 2022.
And in the capital, asking prices have risen by 2 percent since the beginning of the year. The average London seller sold their home for 97.5 percent of asking price in February, according to data from estate agent Hamptons
https://www.dailymail.co.uk/money/mortgageshome/article-11889583/Land-Registry-House-prices-defy-economic-reality-jump-17k-year.html?ns_mchannel=rss&ns_campaign=1490&ito=1490 Land Registry: House prices defy economic reality and rise by £17,000 in a year