House prices up 4.1% in year to March, ONS figures show

House prices increased 4.1 per cent in the 12 months to March 2023, meaning  £11,000 of value was added to the typical home. 

However, on  a monthly basis, prices have fallen for the fourth consecutive time, decreasing 1.2 per cent in March 2023, following a decrease of 0.1 per cent in February 2023. 

The annual rate of growth also slowed down from 5.8 per cent in the year to February 2023, according to data from the Office for National Statistics. 

It is also a substantial decline in annual growth compared to the recent peak in July 2022, when house prices rose 14.3 per cent over the year. 

The typical house price has increased by £11,000 since March 2022, the ONS said

The average UK house price was £285,000 in March 2023, which is £11,000 higher than 12 months ago, but £3,000 less than it was in February. 

It is also £8,000 below the recent peak in November 2022.

Experts said what happens next to property prices would be influenced by what happens to the rate of inflation, which has a significant impact on how much interest households pay on their mortgages. 

Today, it was announced that CPI inflation fell from 10.1 per cent to 8.7 per cent. 

Iain McKenzie, chief executive of the Guild of Property Professionals, said: ‘House prices are still holding steady despite the financial challenges faced by many households. This will be welcome news to sellers who might have expected worse news in the first half of the year.

‘There has been a slight drop compared to last month, but as there are now more properties on the market than this time last year, we are seeing sellers being more flexible on the asking price.

‘We saw today that inflation is finally coming down. This should help reassure prospective buyers that they will be able to afford their mortgage repayments and that confidence in the market will keep house prices robust.’

Growth: House prices rose 4.1% in  the year to March, but declined on a monthly basis

More up-to-date figures released by Rightmove showed that the average asking price of newly-listed homes climbed 1.8 per cent in May to hit a record £372,894.

In England the typical home is now worth £304,000, a 4.1 per cent annual rise, compared to £214,000 in Wales ( up 4.8 per cent), £185,000 in Scotland (up 3 per cent) and £172,000 in Northern Ireland (up 5 per cent).

The South West saw the highest annual price rises of all English regions in the 12 months to March 2023 with 5.4 per cent growth, while London saw the lowest at 1.5 per cent.

Tom Bill, head of UK residential research at Knight Frank, added: ‘UK house price growth continued its return to earth in March following the exceptional growth seen during the pandemic. 

‘Transactions are recovering after hitting their low-point in January and it should be a solid but not spectacular year as the impact of a recovering economy, strong jobs market and record levels of housing equity are kept in check by mortgage rates that are notably higher than 18 months ago. 

‘If stubbornly high inflation keeps interest rates higher for longer, it will increase downwards pressure on prices, which we expect to fall by a few per cent this year.’

The ONS data also showed that private rental prices paid by tenants in the UK rose by 4.8 per cent in the 12 months to April 2023, up from 4.7 per cent in the 12 months to March.

This post first appeared on Dailymail.co.uk