Annual house price growth slows to 6.3%: UK HPI

Average UK house prices increased by 6.3% in the 12 months to January, down from 9.3% in December 2022, according to the latest UK House Price Index from the ONS and Land Registry.

Average house prices increased over the 12 months to by 6.9% in England, 5.8% in Wales, 1.0% in Scotland, and 10.2% in Northern Ireland.

Scotland's annual house price inflation has been slowing since the recent peak of 13.8% in the 12 months to April 2022.

The North East saw the highest annual percentage change of all English regions in the 12 months to January at 10.0%, while London saw the lowest at 3.2%.

On a seasonally adjusted basis, the average UK house price decreased by 0.6% in January, following a decrease of 0.4% in December 2022.

On a non-seasonally adjusted basis, prices decreased by 1.1%, following a decrease of 0.5% in December.

Conor Murphy, CEO and founder of Smartr365, commented: “Aspiring buyers will be pleased to see some of the heat coming out of the property market. UK homes have always been hot property for both domestic and international buyers, but even more so in the last three years due to the generous stamp duty tax break. Many expect the market to continue to cool off throughout the year, with estimates typically ranging between corrections of 8% (Halifax) and 5% (Nationwide). With prices having risen by 6.3% over the year to January, this will be welcome relief for those looking to take their first step onto the property ladder.

“Notwithstanding this, analysis of Land Registry data suggests that the largest uplift in transactions typically occurs in spring, creating an annual market ‘bounce’. Firms must invest in back-end processes now to maximise the imminent uptick in demand. Streamlining admin, lead flow, and product sourcing through the use of mortgage tech tools will be essential for anyone looking to provide consumers with the best possible service during this busy period.”

Nick Leeming, chairman of Jackson-Stops, added: “Despite economic headwinds, the property market remains on course for the months ahead, with only a marginal decrease in house prices reported despite many predicting a more dramatic decline. Much of this data reflects the fallout from Autumn's Trussonomics, where now, as we move into the Spring, we are seeing a much more healthy market with more listings as well as buyers, as people renew their search after putting purchases on hold for longer than usual at the end of last year. Resilience is the new buzz word for housing, with what could be a surprisingly bright summer ahead.

“Sellers have benefited from unprecedented levels of house price growth in recent years and even as this pace softens, low housing stock and stabilising mortgage rates are likely to insulate prices for the foreseeable future. On an annual basis average UK house prices increased by 6.3%, with the average price now £290,000. Even as price growth adjusts slightly month on month, house prices are still £17,000 more than they were a year ago. This was demonstrated further in Rightmove’s latest survey, seeing house guide prices rise by £3,000 – seemingly defying economic gravity but a solid indicator of a resilient market.

“There remain opportunities available and deals to be had for buyers in a position to move quickly. Micro-housing markets continue to see regional nuances in buyer demand and stock availability, but one thing that is clear across Jackson-Stops’ national network is that properties in prime locations with high quality, local amenities are continuing to command a premium. Urban locations and commuter towns that allow buyers to have more space and a manageable commute remain property market gold dust.”