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Annual house price growth slows – industry reaction

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Thu 17 Nov 2022

Annual house price growth slows – industry reaction

he latest UK House Price Index has been released for September showing that house prices climbed 9.5% year-on-year, but remained unchanged compared with a month earlier.

According to data from the Office for National Statistics (ONS), the average property price in the UK now sits at £294,559.

House prices in England rose 9.6% on the year, taking the average property price to £314,278 and in Wales, property prices saw a 12.9% annual rise, leaving the average house price at £223,798.

Meanwhile, in London, a 6.9% annual increase means that the average home in the capital is now priced at £544,113.

On a monthly basis, prices in England failed to move, in Wales they increased by 2% and, in London, house prices dropped by 0.6%.

Industry reaction:

Tom Bill, head of UK residential research at Knight Frank, said: “In a feat unlikely to be repeated in October, UK house prices were flat in September compared to the previous month. Prices fell last month after the mini-Budget caused mortgage rates to spike but house prices are not necessarily now on a steeper downwards trajectory.

“We expect mortgage rates to come down and a sense of stability to return as financial markets respond positively to the new government. However, the lending landscape is shifting after 13 years of ultra-low borrowing costs, which we believe will put enough downwards pressure on prices so that they return to their summer 2021 level.”

Nicky Stevenson of Fine & Country commented: “The mini-Budget towards the end of the month sparked unprecedented volatility in the mortgage market, something which will become more apparent in the months ahead.

“All eyes will now turn to chancellor Jeremy Hunt’s Autumn Statement, which is expected to include both tax rises and spending cuts.

“Changes to capital gains tax allowances could have an adverse impact on the buy-to-let sector at a time when many landlords are already exiting, and potential new entrants are finding the benefits no longer outweigh the uncertainty.

“A private rental sector in retreat would mean a deepening accommodation crisis across the regions and spiralling rents for tenants.”

Director of Benham and Reeves, Marc von Grundherr, said: “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.”