Greater London has seen a return to a positive rate of growth in the housing market, following a fall of -1.4% in April, e.surv has found.

Changes in average house prices over the last 12 months are positive in all areas as of June 2023, with the Northeast remaining in the top 10 areas in terms of house price growth.

The research by e.surv has shown that the average house price in England and Wales in June 2023 was £371,204, down by -0.3% on May, although it has grown by 1.2% compared to June 2022.

Wales has fallen from second place in the Government office region (GOR) table in April to bottom, seeing a fall of -1.8% in house prices. This is the first time this has been the case since December 2015.

This drop has been attributed to the premium in council tax added to second-home owners and those with unoccupied properties in Wales from April 2023, which have seen premiums increase by up to 300%, depending on the local authority.

The Bank of England rose interest rates to 5% in June, and with further rises expected, external pressures on the housing market are continually growing, e.surv says.

Director at e.surv, Richard Sexton, said: “Given the growth in house prices over the last few years, our data, which includes cash purchases, shows a resilient picture. On an annual basis, the average sale price of completed home transactions in England and Wales in June 2023 rose by some £4,500, or 1.2%, and now stands at £371,204. This is the lowest rate of annual increase since May 2020, and is the tenth month in succession in which the annual rate of price inflation has fallen.

“Cash purchases matter when borrowing costs are rising at such a rate. There remains too little of the right kind of property and the reduction in expected house building figures over the coming months will do nothing to alleviate the lack of supply which continues to support prices.

“That said, we are not surprised that more expensive mortgage costs are impacting prices to some extent and that pressure will remain as the Bank of England continues to battle inflation. If we look at the data on a monthly basis, the average price dropped in June 2023 by some £970, or just -0.3%. This is the third-largest monthly fall in prices this year and the fifth in succession.

“But even this monthly fall does not reflect the strength of UK housing in the longer term as an asset group. Since March 2020 we calculate the rate of growth has been 18% and even accounting for inflation this is a strong performance.”

Share Story: