ONS housing chief says UK house price inflation continues to ease across regions

House price inflation across the UK has slowed again, according to the latest official data from the Office for National Statistics.

Aimee North, Head of Housing Market Indices at ONS, said: “Annual house price inflation slowed again in April across most UK nations and regions. The North East showed the highest annual growth, while London remains the slowest growing English region.”

The figures reveal a clear cooling in the property market following the post-pandemic boom.

The Numbers Behind the Slowdown

UK house prices rose by 3.5% in the 12 months to April 2023, down from 4.1% the previous month. The average residential property now costs around £286,000 – up just £1,000 from March.

But the current market tells a tale of two speeds. While prices have risen £9,000 compared to a year ago, they remain £7,000 below the recent peak hit in September 2022.

Regional differences paint an even starker picture. The North East recorded the strongest annual growth at 5.5%, even as London managed just 2.4% – the weakest performance among English regions.

England’s average house price reached £306,000, representing annual growth of 3.7%. Wales saw more modest increases of 2.0% to £213,000, with Scotland recording similar growth to around £187,000. Northern Ireland bucked the trend with 5.0% growth, taking average prices to £172,000.

Why the Market Has Cooled

The slowdown reflects broader economic pressures hitting homebuyers. Bank of England base rates have surged from just 0.1% in late 2021 to 5.25% by 2024, steeply increasing mortgage costs.

Higher borrowing rates have squeezed affordability just as households face rising living costs. The combination has dampened demand, chiefly in previously overheated southern markets.

ONS data suggests the property boom that began during the pandemic has now largely run its course. But regional variations continue, with northern areas and devolved nations showing more resilience than London and the South East.

In more recent commentary, North noted: “UK average house prices are little changed from a year ago, but annual inflation is rising in Scotland” – highlighting how different parts of the country are experiencing distinct market conditions.

Market Pressures Mount

The housing market now faces a delicate balancing act. Slower price growth may help first-time buyers, but higher mortgage rates continue to constrain purchasing power.

Estate agents report subdued transaction volumes as buyers and sellers adjust to the new reality of higher borrowing costs. Many existing homeowners are reluctant to move, chiefly those locked into low fixed-rate deals.

The ONS continues developing its housing statistics under North’s leadership, integrating multiple data sources to provide clearer market insights. This work helps policymakers and consumers handle an increasingly complex landscape.

Key Takeaways

• UK house price inflation slowed to 3.5% annually, down from 4.1% the previous month
• Regional divergence continues with North East leading at 5.5% growth while London trails at 2.4%
• Average UK house prices remain £7,000 below September 2022 peak despite annual increases

What This Means for Kent Residents

Kent homeowners and buyers face the double challenge of high absolute prices combined with increased borrowing costs, as the county sits within the slower-growing South East region. Prospective first-time buyers may find the moderation in price growth helpful, but affordability remains constrained by mortgage rates that have increased sharply from historic lows. Kent residents should check the latest ONS and HM Land Registry data for their specific local authority when planning property decisions, as using Bank of England guidance to understand how rate changes affect mortgage costs – above all important for those approaching remortgage deadlines or considering moves within the county’s commuter belt areas.