UK house price inflation witnessed a significant slowdown in May 2023, according to official figures released by the Office for National Statistics (ONS).
The annual increase in property values stood at 1.9% during that period, contrasting sharply with the 14.1% surge witnessed in July 2022.
UK average house prices increased by 1.9% in the 12 months to May 2023.
This is down from 3.2% in April 2023.
➡ https://t.co/oK4WnXvvbS pic.twitter.com/pF0InCdV9f
— Office for National Statistics (ONS) (@ONS) July 19, 2023
The average UK house price in May 2023 was recorded at £286,000, marking a £6,000 increase from the previous year. However, this figure still lagged behind the peak seen in September 2022 by £7,000.
Taking a closer look at the regional variations within the UK, house prices showed varied growth rates over the 12 months to May 2023. England experienced a 1.7% annual growth, bringing the average house price to £304,000. Wales followed with a 1.8% increase, reaching an average of £213,000, while Scotland saw a 3.2% rise, taking the average house price to £193,000. Meanwhile, Northern Ireland exhibited a robust growth rate of 5.0%, with the average house price standing at £172,000.
Within England, the North East region recorded the highest annual percentage increase in house prices at 4.0%, while the East reported no growth (0.0%) over the same period.
In May 2023, on a seasonally-adjusted basis, the average UK house price experienced a marginal decline of 0.4%. This decrease followed a modest month-on-month increase of 0.5% observed in April 2023.
Aimee North, the head of housing market indices at ONS, highlighted that UK annual house price inflation has been consistently slowing down for seven consecutive months, “UK annual house price inflation slowed again in May for the seventh consecutive month,” she said.
“While the average UK house price remains higher than 12 months ago, prices are now £7,000 below the recent peak in September 2022.
Simultaneously, UK rental prices saw a notable surge in June 2023, registering the highest annual inflation since records began in January 2016. Private rental prices paid by tenants in the UK rose by 5.1% annually, up from 5.0% in the 12 months to May 2023.
Across different regions in the UK, rental prices exhibited varied growth rates. England reported a 5.1% annual increase, while Wales experienced a slightly higher surge of 5.8%. Scotland followed closely with a 5.5% rise in rental prices in June 2023.
Breaking it down further within England, the West Midlands recorded the highest annual percentage change in private rental prices during the 12 months to June 2023, at 5.4%. On the other hand, the North East reported the lowest growth rate, with rental prices rising by 4.4% annually.
London, often a key indicator of the rental market, experienced a notable annual percentage change of 5.3% in private rental prices in the 12 months to June 2023, marking its highest annual rate since September 2012.
Interestingly, the release of these figures coincided with the news of a surprising drop in inflation rates. The Consumer Prices Index (CPI) inflation eased to 7.9% in June 2023, down from 8.7% in May, marking its lowest rate since March 2022.
As the UK property market continues to experience fluctuations, monitoring house price inflation and rental price trends remains critical for individuals, businesses, and policymakers alike.
