House prices rose in January, ONS says, with new construction rising by as much as 9%

According to the latest figures from the Office for National Statistics, house prices rose by 0.5 percent in January.

The average home was worth 0.6 percent less than a year earlier, but this was much less than the 2.2 percent decline recorded in the twelve months to December 2023.

The typical house sells for £282,000 in January, which is £2,000 lower than twelve months ago.

New-build homes appear to be leading the recovery, with prices rising by as much as 8.8 percent in January.

Ed Phillips, chief executive of brokerage group Lomond, said: ‘This suggests that the mortgage market momentum built up since the tail end of last year is now starting to translate into actual sales and the market appears ready to take action. come. the upcoming months.

‘There is certainly no sign of the house price crash predicted by many.’

The ONS says the data is a preliminary estimate and may be subject to change.

Price increase for new construction

According to the ONS figures, new-build homes have seen significant price growth, which could mask the decline in house prices in the rest of the market.

Year on year, new-build homes have risen in price by as much as 16.6 percent. That compares with an annual decline of 2.4 percent for other properties.

Daniel Norman, CEO of property development platform Aprao, said: ‘This appetite for new homes should give UK developers confidence that now is the right time to break ground and deliver much-needed supply to the market.

“Homebuyers are willing to pay the premiums associated with new-build homes, even as borrowing costs remain substantially higher than in previous years.”

Prices in London are starting the year strongly

London saw the biggest monthly price increase of any region, up 2.5 percent, according to ONS data.

However, prices are still down 3.9 percent year-on-year.

Marc von Grundherr, director of London estate agency Benham and Reeves, said: ‘While it certainly looked like the London market was struggling to recover at the same pace as the rest of Britain, the latest figures show the capital has seen a significant increase in real estate values ​​during the beginning of this year.

‘While homes in the capital may be selling slightly lower than the historic highs of recent years, we continue to see very strong buyer interest, with a robust number of transactions taking place.

“This bodes well for the year ahead and while we are already seeing signs of a rebound in London, we expect an even faster return to form to be on the cards once mortgage rates finally start to fall (further).”

The South West of England also saw a monthly increase in house prices of 1.5 percent in January, while house prices in Scotland rose by 1.3 percent – ​​and an increase of 4.8 percent year on year.

Meanwhile, prices fell month-on-month in almost half of the UK’s regions, including in the East Midlands where prices fell by 1.4 per cent and in the North East where prices fell by 1.7 per cent.

Nicholas Finn, managing director of Garrington Property Finders, said: ‘Average house prices were still kept in check at the start of the year, but today’s figures suggest they have regained some of the ground lost during the 2023 reset , start to recover.

‘However, two things are now keeping prices in a holding pattern: an increase in the number of homes coming onto the market and a leveling off of mortgage interest rates. It may take several months for borrowing costs to fall further, which could take some of the momentum out of price inflation.

‘The result is that well-informed buyers, who have their finances in order, are still closing highly competitive deals.

‘With many areas offering significantly better value than during the post-pandemic boom, buyer interest is back as many people who postponed their moving plans last year decide now is the time to take action before prices rise again .