House prices rise by £16,000 according to the ONS

House prices rose by £16,000 during the year to February, according to the ONS, but growth slowed compared to a month before

  • The median house price in the UK was £288,000 in February 2023
  • Growth in the year to February slowed from a month earlier when it stood at 6.5%

House prices in the UK rose 5.5 per cent in the year to February 2023, adding £16,000 to the average property value.

However, the rate of growth is slower than a month earlier, when prices rose 6.5 percent in the year to January, according to the Office for National Statistics.

Experts say the reduced growth reflects the “dismal midwinter” for real estate when there were three consecutive month-on-month price declines.

This was largely due to the effects of Liz Truss’s mini-budget as mortgage costs skyrocketed.

The average house price in the UK was £288,000 in February 2023, an increase of £16,000 in a year

“Fortunately, things have thawed out quite a bit since then,” said Jonathan Hopper, CEO of buying broker Garrington Property Finders.

“The frayed nerves are starting to sink in and pragmatic buyers are looking much more at the long-term in their plans, rather than focusing on how prices might change over the next two months.

“Supply is slowly improving, even if it remains low by historical standards – and this keeps a floor under falling prices, especially in the big cities, which are clearly busier than rural areas.”

The number of homes for sale has reached its highest level in 27 months, according to new figures.

Many had previously put their relocation plans on hold after mortgage rates rose to their highest level in 14 years and home prices began to fall late last year.

The average house price in the UK was £288,000 in February 2023, £5,000 below its recent peak in November 2022, the ONS figures show.

Despite the relative resilience of the housing market, inflation remains high at 10.1%, raising fears of another Bank of England rate hike in May that could further constrain buyers’ budgets.

House price growth slowed in February compared to the previous month, despite overall resilience

Jeremy Leaf, a North London estate agent and former Rics residential chairman, says: ‘Despite another small month-on-month price decline, the housing market is proving resilient.

“These are the most comprehensive of all housing surveys, but the numbers are a bit dated and inevitably report on activity from a few months earlier, when the market was in a slump.

Since then, confidence has slowly improved in response to more choice and stabilizing mortgages, if not base rates.

“However, concerns about inflation remain and buyers want to see the value, so they flexed their muscles before making any decisions.”

What to do if you need a mortgage

Borrowers who need to find a mortgage because their current fixed-rate contract is about to expire, or because they have agreed on a home purchase, should explore their options as soon as possible.

This is Money’s best mortgage interest calculator powered by L&C that can show you deals that match your mortgage and property value

What if I have to borrow again?

Borrowers should compare rates and speak with a mortgage broker and be prepared to trade to secure a rate.

Anyone with a fixed-rate deal expiring in the next six to nine months should research how much it would cost them to re-mortgage now — and consider getting a new deal.

Most mortgage agreements allow fees to be added to the loan and are not charged until it is closed. By doing this, borrowers can secure a rate without paying expensive arrangement fees.

What if I buy a house?

Those with an agreed home purchase should also aim to secure rates as soon as possible so they know exactly what their monthly payments will be.

Homebuyers should be careful not to overextend themselves and be prepared for the possibility that house prices could fall from their current highs, due to higher mortgage rates limiting people’s borrowing capacity.

Compare mortgage payments

The best way to compare mortgage rates and find the right deal for you is to talk to a good real estate agent.

You can use our best mortgage interest calculator to display deals that match your home value, mortgage size, term and fixed interest needs.

However, bear in mind that rates can change quickly, so if you need a mortgage it’s advice to compare rates and then speak to an estate agent as soon as possible so they can help you find the right one mortgage for you.

> Check out the best fixed rate mortgages you can apply for

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