UK house prices increase for first time in nine months

Average UK house prices have increased for the first time since June last year, signalling potential green shoots in the UK’s property market.

Meanwhile, rampant rent price inflation also slowed down slightly in the latest set of official data.

The Office for National Statistics (ONS) found average house prices increased by 1.8% in the 12 months to March.

This lifted the average house price across the UK to £283,000, up from £281,000 in the previous month.

The annual rise represented a recovery in pricing after house prices had fallen by 0.2% in the 12 months to February.

Rise

ONS chief economist Grant Fitzner said: “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.”

Average house prices in England were up 1% to £299,000, while properties saw a 1.3% average increase to £214,000 in Wales and 6.7% average increase to £192,000 in Scotland in the 12 months to March.

Average house prices in Northern Ireland were up 4% to £178,000 for the first three months of 2024, compared with the same quarter a year earlier.

Hikes

It comes as interest rates remain at a 16-year-high of 5.25% after hikes by the Bank of England in a bid to grapple rising inflation.

However, the prospect of rate cuts later this summer mean mortgage rates have come down from peak levels from late last year, although they still represent a significant increase for most households having to re-mortgage.

Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “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 revealed that UK private rents increased 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.

Wales

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 said average rents were up 10.4% in the 12 months to February.

Mr Fitzner said: “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.