ONS: House price growth continued to slow in March

House price growth slowed further in March, but prices still remain higher when compared to the same period last year, according to the latest government house price index.

Average prices rose 4.1 per cent in the 12 months to March, but this was down from the 5.8 per cent increase seen in February.

Today’s (May 24) data released by the Office for National Statistics showed the average UK house price increased by £11,000 in the last year to £285,000 in March.

However, this was £8,000 below the recent peak in November 2022. 

Average house price, UK, January 2005 to March 2023

Source: ONS

While today’s figures remain positive for anyone looking to sell their home, home movers and first-time buyers still have to contend with historically high prices.

But despite this, estate agents have said the sales market this year has remained strong. 

For the first time in a very long time, it's about as even a market as you can get, namely neither a buyers' nor a sellers' market

Matt Baldock, Charles David Casson

Matt Baldock, director of Chelmsford-based estate agents Charles David Casson, said we have reached a period where the market is “even” and is not swinging in favour of buyers or sellers.

"Buyers have now accepted current mortgage rates as the new norm, much like we all have with petrol prices. At first, you complain and stall but ultimately you adapt and there is always a real desire in this country to own a home,” Baldock said.

"For the first time in a very long time, it's about as even a market as you can get, namely neither a buyers' nor a sellers' market. It will eventually tip one way or the other but for now buyers don't feel they are overpaying and sellers, while realising prices aren't racing away anymore, are not underselling.”

He added: "The fact that inflation is now back in single digits could also boost property market sentiment, especially if it continues to fall. 

“Overall, I see stability for the year, in house prices, mortgage rates and buyer demand, and after the past few years the market certainly needs a period of stability."

Renters

However, Knight Frank’s head of UK residential research, Tom Bill noted that the situation is currently not as positive for renters. 

Bill pointed out that around a fifth of households in England are renting and are faced with a market where rents continue to rise. 

“Politicians have targeted landlords with a series of tax hikes in recent years and as more of them leave the sector, fast-rising rents means the pain has spread to tenants,” Bill said. 

“More details were announced last week on the government’s renters reform bill, which needs to make sure it doesn’t make a bad situation worse,” he added. 

Location, location, location

The North East continued to have the lowest average house price of all the English regions, with the average property price sitting at £157,000 in March. 

By comparison, the region with the highest annual house price inflation, the south west, saw prices rise by 5.4 per cent in the year to March 2023, down marginally from 6.2 per cent in February. 

London remains the most expensive region in the UK, with an average price of £523,000 - however this was the region with the lowest growth rate, with prices increasing by 1.5 per cent in the year, down from 2.9 per cent in February. 

In Wales, the average price sat at £214,000 - an annual increase of 4.8 per cent. 

This compared to a 4.1 per cent annual increase in England, where the average price in March was £304,000.

Meanwhile Northern Ireland saw an annual increase of 5 per cent, bringing the average house price to £172,000 in March. 

Scotland saw an annual increase of 3 per cent - the lowest rate of increase out of England, Scotland, Wales and Northern Ireland - bringing the average house price to £185,000. 

jane.matthews@ft.com