New data released by HM Land Registry shows average house price growth flatlined between August and September of this year – though the industry is increasingly confident that any slump is more of a normalisation than a “sheer market crash”.
Regionally, prices fell 0.6% in London, though rises of as much as 0.6% were seen in areas such as the North West.
On an annual basis, the average price rise remains at 9.5%, bringing the average property price in the UK to £294,559 – or £314,278 in England.
Yet, despite annual growth remaining strong, this represents a significant drop-off from growth of 13.1% in the year to August 2022, and 15.2% in the year to July 2022.
Industry reaction
“Today’s data is further evidence of a turning tide for house prices, reflecting the same pattern of declining growth we have started to see emerge over the last two months,” said Andy Sommerville, Director at Search Acumen, adding:
“As the impacts of previous rate rises and inflation filter through into house prices over coming months, we’d expect to see further declines coming down the tracks.”
However, on the bright side Sommerville said the government’s return to a “more traditional economic approach” will stabilise mortgage markets which, coupled with the Bank of England’s indication that base rate rises into 2023 would be unlikely, means “fears around runaway mortgage rates creating a demand cliff edge will now come to pass”.
Malcolm Webb, Technical Director at Legal & General Surveying Services, said that despite economic pressures “applying the brakes” on market momentum, the market remains “something of a mixed bag”:
“Property prices are still higher than they were at the same point last year and the slowdown that we’re seeing remains modest. Coupled with the shortage of available housing stock, market activity remains steady.
Tomorrow’s Budget statement should provide further details on the government’s ambitions for the housing market.”
“We’re yet to see any real signs of a notable drop in house prices despite a turbulent few months and now that the government has steadied the waters, any movement is likely to be a gradual return to normality rather than a sheer market crash,” said CEO of Alliance Fund Iain Crawford, though he noted that tomorrow’s Budget could indeed “put the cat amongst the pigeons in this respect”.
Managing Director of Barrows and Forrester James Forrester said that, despite the market remaining “resolute”, a clear picture will not emerge until 2023:
“It’s incredibly hard to gauge the true health of the UK property market at present, with increasing mortgage rates leading to a period of turmoil, followed by a renewed level of certainty as a result of a government refresh.
That said, there remains a large degree of economic instability and this week’s Autumn Budget may well add to this.
At the same time, we can expect two things come December. Mariah Carey in the music charts and the usual seasonal slowdown in property market activity.”
Director of Benham and Reeves Marc von Grundherr added:
“The property market has continued to weather the storm of late and while we may have seen a reduction in buyer demand due to higher mortgage rates, we’re simply not seeing any downward pressure applied to sold prices, despite a static rate of growth on a monthly basis.
This is largely due to the fact that buyers have been keen to transact at pace in order to secure the rates currently on offer, before they climb even higher. In doing so, they’ve helped to maintain a consistent level of activity in the process which has kept the market afloat.”
