(Sharecast News) – Growth in UK house prices slowed in May, according to data released on Wednesday.
The official house price index from the Office for National Statistics showed that house price rose by 1.9% in the 12 months to May, down from a revised 3.2% growth in April.
The average price of a house was £286,000, up £6,000 on a year ago, but £7,000 below the recent peak in September 2022.
Data from the ONS also showed that private rental prices paid by tenants rose by 5.1% in the 12 months to June 2023, up from 5% in the year to May. This marked the largest annual percentage change since this data series began in January 2016.
Gabriella Dickens, senior UK economist at Pantheon Macroeconomics, said: “The official seasonally-adjusted measure of house prices fell in May before the renewed jump in mortgage rates quashed demand; we expect prices to fall considerably further over the coming months.
“For context, May’s fall left prices 1.1% below their November peak, but still a whopping 24.6% above their average 2019 level. Naturally, variation exists across regions; prices generally are falling fastest in areas which saw the sharpest increases during the pandemic, such as in the North West and Yorkshire.
“Compared to their pre-pandemic level, though, price growth remains weakest of all in London, likely because buyers’ affordability already was stretched before the recent rise in mortgage rates.
“Timely measures, meanwhile, suggest the recent sharp jump in mortgage rates is weighing more heavily on prices. Indeed, the net balance of surveyors reporting rising prices fell in June to its lowest level since mid-2009, according to the RICS Residential Market Survey.”
