House prices are still on the rise, but the pace of the ascent has slowed to a rate not seen for five years, new statistics have revealed.
House prices are still on the rise, but the pace of the ascent has slowed to a rate not seen for five years, new statistics have revealed.
According to the latest comprehensive house price data from the Office for National Statistics (ONS) the cost of the average UK home has risen by 3% in the year to May 2018.
This compares to the previous month of April, when year-on-year growth was 3.5%. Since the middle of 2016 the growth rate of house prices has been slowing and has remained below 5% since this time with the exception of October 2017.
Buyers and sellers
But what does this mean for people who are trying to buy or sell a property?
According Alex Depledge, found and CEO of RESI.co.uk this slowdown in property price growth is a concern for people intending to sell their homes.
Depledge said: “Homeowners wanting to attract buyers in this sluggish market should consider extending or renovating their home in order to increase the appeal of the property while also making the most out of ‘dead space’.
“This in turn boosts the value of the home and, to put this into perspective, the average homeowner in England adds between £1,500 and £4,000 per square metre when they extend it.”
For first-time buyers, meanwhile, a slowdown should be good news. Indeed, John Goodall, CEO and co-founder of buy-to-let specialist, Landbay, said the early summer slowdown would help to provide a slight respite for those hoping to get a foot on the property ladder.
“However,” he added, “the overall cost of living and outstandingly high deposit costs continue to prevent many aspiring homeowners from entering the market.”
John Eastgate, sales and marketing director at OneSavings Bank warned many first-time buyers will face challenges getting a mortgage for some time.
He said: “House price growth falling to a near five-year low might seem music to the ears of would-be first-time buyers, however the reality is that even at this subdued level, house price inflation continues to outstrip wage inflation, so the tune is a bit flat.
“With our turbulent political environment, clarity on housing policy in the short term seems highly unlikely, hence despite the ever increasing clamour around the topic, the status quo looks set to continue for some time – getting a mortgage will be challenging and renting will be the only viable alternative.”
Statistics at a glance
- The average house price in the UK was £226,000 in May 2018, this is £6,000 higher than in May 2017.
- London is the region with the highest average house price, currently at £479,000. The South East follows with average house prices at £322,000 and then the East of England at £289,000.
- The lowest average price is in the North East of England, coming in at £129,000.
- When it comes to house type, detached homes have shown the biggest increase in price, rising by 4.6% in the year to May, and averaging £344,000.
- The average price of flats and maisonettes remain unchanged.
