22 May 2024 , 11:19
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The average UK house price has seen an increase for the first time since June of last year, indicating a potential revival in the UK's property market.
In addition, the rapid inflation of rent prices has shown a slight decrease according to the latest official data. The Office for National Statistics (ONS) reported that average house prices rose by 1.8% in the 12 months leading up to March.
This pushed the average UK house price to £283,000, a rise from £281,000 in the previous month. This annual increase signifies a recovery in pricing following a 0.2% fall in house prices in the 12 months leading up to February.
Grant Fitzner, the ONS chief economist, stated: "Average UK house prices grew over the year for the first time since last summer. House prices saw an annual rise in every nation and region, except London and the South East, with Scotland seeing the fastest annual growth."
In England, average house prices increased by 1% to £299,000, while properties in Wales saw a 1.3% average increase to £214,000 and in Scotland a 6.7% average increase to £192,000 in the 12 months leading up to March. In Northern Ireland, average house prices were up 4% to £178,000 for the first three months of 2024, compared with the same quarter a year earlier.
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This comes as interest rates remain at a 16-year-high of 5.25% following increases by the Bank of England in an attempt to tackle rising inflation. However, the possibility of rate cuts later this summer means mortgage rates have dropped from their peak levels late last year, though they still represent a significant increase for most households needing to re-mortgage.
Sarah Coles, head of personal finance at Hargreaves Lansdown, commented: "Buyers have finally squeezed some growth out of the property market. They haven't exactly set the market on fire, but it they've warmed it up enough to push prices into positive territory for the first time in almost a year. It's a much more comfortable place to be buying right now."
On Wednesday, the ONS also disclosed that UK private rents rose by 8.9% in the 12 months to April. This is a slowdown from 9.2% for the 12 months to March, with rental price inflation easing for the first time since December last year. Average rents increased by 8.9% to £1,293 in England, by 8.2% to £730 in Wales and by 10% to £952 in Scotland, in the 12 months to April 2024. In Northern Ireland, the ONS reported average rents were up 10.4% in the 12 months to February.
Mr Fitzner stated: "After two years of unprecedented and generally accelerating annual growth, private rental price rises showed tentative signs of easing. Most nations and English regions saw a slowdown, with a notable easing in London."
London rent inflation was still the highest across areas of England, with a 10.8% rise year-on-year, although this slowed down from a record high of 11.2% in the previous month.