Annual house price growth slows to 0.2%: UK HPI

Average UK house prices increased by 0.2% in the 12 months to August, down from 0.7% in July, according to the latest UK House Price Index from the ONS and Land Registry.

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

Average house prices over the year remained little changed in England to £310,000 (0.0%), decreased by 0.1% in Wales, and increased by 1.1% in Scotland. Average house prices increased by 2.7% to £174,000 in the year to Q2 2023 in Northern Ireland.

The North East saw the highest annual percentage change of all English regions in the year to August at 3.6%, while the East of England saw the lowest at -1.6%.

Paul Glynn, CEO at Air, said: While we are seeing house price growth flatten out, we have also seen a number of mainstream lenders recently reduce their mortgage rates as they price in future base rate rises, and this will ultimately have a positive impact on buyers’ sentiment. What this shows is that the property market continues to be resilient despite growth slowing compared to the usual October uplift.

“As borrowers navigate the complexity of the market, it is important that advisers support their customers with a range of solutions to meet their individual financial needs. With this in mind, access to effective sourcing systems and affordability tools will be crucial for advisers to achieve the best possible outcomes for their clients.”

Alex Lyle, director of Richmond estate agency Antony Roberts, commented: "These numbers reflect what was happening in August and while we would expect a lull in the summer months with low activity, we’ve found that the housing market is not as exciting this autumn as it was in the spring.

"The market is not as busy as it should be and while viewings have picked up, new stock must be at the right price or there isn’t the depth of demand for it. Typically, we are seeing two to four enquiries per property, compared with 10 to 15 earlier on in the year.

"That said, a good address at the right price will sell, whereas if it is an overpriced, slightly compromised property, then forget it. Buyers are waiting to see what happens with mortgages and if interest rates are held again next month, it will be viewed as a little pigeon step in the right direction."

Sasha Sprake, head of business development at finova Connect, added: “Despite the recent softening of house prices, it's important to acknowledge that average prices are still higher than pre-pandemic levels and are changing in nominal terms. The gap between demand and housing supply also persists and will continue to place pressure on house prices for some time.

“As we approach the end of the year, the market is turning a corner as mortgage rates are gradually declining and the Bank of England’s decision to hold interest rates has given many aspiring buyers a much-needed confidence boost."