House prices remain slightly lower than a year ago, according to the latest figures from the Office for National Statistics.
The ONS revealed that the average UK house price rose by 0.4 per cent between January and February, but remained 0.2 per cent lower than a year ago.
It means the average house price was £281,262 in February 2024, up from £280,660 at this time last year.
Fixed prices: Average UK house prices are down 0.2% year-on-year as higher mortgage rates continue to weigh heavily on buyers.
Anthony Codling, European head of housing and building materials at investment bank RBC Capital Markets, said: “House prices remain indecisive, having fallen just £562 compared to a year ago.”
‘When we consider all other economic factors and political machinations, house prices continue to show a high level of stability and appear to be able to weather any storm that comes their way.
“This stability should encourage more people to move home, and with wages currently rising faster than inflation, homebuyers may find they have a bigger budget than they thought.”
Iain McKenzie, chief executive of The Guild of Property Professionals also believes resilience should encourage buyers and sellers.
He said: ‘Sellers will be delighted with another month of modest house price growth and this trend could continue as we move into the busy spring and summer months.
‘A return to annual growth is now within reach after a difficult year for homeowners in 2023, many of whom may have felt they had missed an opportunity to sell their property.
“Buyers may not be as enthusiastic about the prospect of house prices rising, but it should be reassuring to know that any purchase made now is unlikely to lose value immediately upon exchange.”
What is happening with house prices across the country?
What’s happening to the price of a person’s home could change depending on the area or type of property they live in.
New builds have seen significant price growth, according to ONS figures, which could be masking further falls in house prices in the rest of the market.
Year on year, newly built properties have increased in price by a staggering 16.4 per cent. That compares with a 2.5 percent annual drop for other properties.
Those who live in detached or semi-detached houses are more likely to have seen the price of their home rise than those who live in semi-detached houses or flats.
The average detached home increased 0.5 percent year-on-year, while the average semi-detached home increased 0.7 percent.
Meanwhile, the average number of terraced houses and flats or maisonettes has fallen 1 per cent in the 12 months to February this year.
But there are also big regional differences. The average property in London has fallen 4.8 per cent in the last 12 months and homes in the West Midlands are down 2.9 per cent year-on-year, after the average property price fell 1.2 per cent between January and February.
However, the average property in Scotland has risen 5.6 per cent year-on-year despite prices falling 0.6 per cent between January and February.
The average home in the North East of England is up 2.9 per cent after an extraordinary 3.2 per cent monthly rise in house prices in February.
Rob Southwell, area partner at estate agency Burchell Edwards in the West Midlands, said: “Property availability and stock has increased steadily since the start of the year, allowing buyers to negotiate further, submitting lower offers and making lower the agreed sales prices, even if the sales prices remain stable.
‘Sellers who price their properties competitively achieve better results for both viewers and bids, creating competition among buyers, ultimately leading to higher prices.
“However, buyers driven by greater property availability are doing everything they can to get a good deal and negotiating harder than we have seen in many years.”
What’s next for home prices?
The ONS House Price Index uses data from the Land Registry and is based on the average sales price of the average property.
However, real estate transactions typically take months to complete, meaning they don’t necessarily reflect what’s happening in the real estate market right now.
Nationwide and Halifax’s separate house price indices (which track the value of their mortgage transactions) are not much different.
The latest Halifax House Price Index said house prices are up 0.3 per cent compared to this time last year. Meanwhile, Nationally there has been an annual increase in house prices of 1.6 percent..
Jonathan Hopper, chief executive of estate agency Garrington Property Finders, believes property prices will remain slightly in limbo until further cuts to mortgage rates come.
He said: “The problem is that the recovery has lost steam since then as the timetable for major interest rate cuts slips.”
‘Consumer inflation is falling, but not fast enough. At 3.2 per cent, it is still well above the Bank of England’s target, so the Bank will be in no rush to reduce the cost of borrowing to more normal levels.
‘As mortgages remain so expensive, the sums still don’t add up for some potential buyers.
‘Tens of thousands of people who delayed their moving plans last year are now eager to do so, but until interest rates start to fall again, many will remain undecided.
‘The prospect of electoral uncertainty later this year may make the top of that fence very busy in the coming months.
“The property market is heading in the right direction, but progress is likely to be slow and winding, with wide variations between regional and local markets.”
Regional differences: House price changes will be different depending on where you live
Ed Phillips, chief executive of estate agency Lomond Group, shares this view.
“We have seen numerous indicators of market health recovery in recent months, but any improvement in selling prices will always be more measured,” Phillips added.
“So while stronger monthly growth suggests we’re headed in the right direction, it may take a few more months before the return of buyer activity tips the annual sales price growth rate into positive territory.”
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