Annual house price growth slowed to 1.9% in the year to May, according to the latest UK House Price Index published by the Office for National Statistics (ONS).
The latest figure is down from a revised 3.2% in the 12 months to April, and significantly down from the recent peak of 14.1% recorded in July 2022.
This latest movement means the provisional estimate for the average UK house price was £286,000 in May, a total £6,000 higher than 12 months ago, but £7,000 below the recent peak in September of last year.
Average house prices increased over the 12 months to May to £304,000 in England (1.7%), £213,000 in Wales (1.8%), £193,000 in Scotland (3.2%) and £172,000 in Northern Ireland (5.0%). The ONS also revealed that the North East saw the highest annual percentage change of all English regions in the 12 months to May 2023 (4.0%), while the East saw the lowest (0.0%).
Reacting to the latest ONS, technical director at Legal & General Surveying Services, Malcolm Webb, said: “It may seem that the UK housing market has entered a turning point. However, considering the full context of these price variations is important. UK house prices have enjoyed decades of growth, reaching all-time highs during the immediate post-pandemic period. As such, any drop in house prices seen today should be considered something more of a levelling out in asking prices.
“The reality is that there’s still a sizeable discrepancy between available housing supply and market demand, keeping upwards pressure on prices - especially in certain areas of the UK. Nevertheless, we should remember that house prices can vary significantly by region, so homeowners should always seek advice from a local expert to scope out their available options.
Air CEO, Paul Glynn, added: “Given recent developments in the mortgage market, the slight flattening in May’s figures was to be expected. A gradual slowdown and a levelling out in house prices after the historic peaks of 2021 isn’t quite a cause for alarm. It is true the market outlook has been clouded by increases to the Bank of England base rate, but these efforts should act as a counterweight, pulling inflation downwards to a more manageable level.”
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