Monitoring the housing market is very important for many, particularly those doctors and dentists who are looking to purchase their first home or who are investing in buy-to-let properties. Our monthly Property Price Update gives you a summary of what the experts are saying.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
UK Property Market Update
Annual house price growth remained largely unchanged month on month with a 0% change, but has fallen 5.3% year on year in September, staying consistent with the 5.3% drop in August.
Housing market activity remains weak, with only 45,400 mortgages approved for purchase in August, 30% below the monthly average from before the pandemic. The average house price was down slightly from £259,153 in August to £257,808 in September.
The state of the market is not surprising given the fact that there is an affordability issue in terms of house prices thanks to the cost of living crisis. For example, the average first-time buyer who was able to put 20% down as a deposit is now spending 38% of their take home pay on a mortgage payment, nearly 10% more than the long-run average of 29%.
There does seem to be some light at the end of the tunnel, however. Investors have amended their expectations for the Bank Rate in recent months, citing the reduction of inflation pressure on the UK economy and labour market conditions softening. As a result, there has been downward pressure on longer term interest rates which are what influence fixed rate mortgage pricing. As long as there are no unexpected disruptions, the pressure on those remortgaging or looking to buy a home will ease.
This does not mean, however, that borrowing costs are likely to return to the level we saw in the immediate post-pandemic aftermath. What will make the most impact on mortgage rates and affordability though, will be solid income growth and modestly lower house prices.
Prices falling across all regions
The weakest performing region in Q3 was the South West, with prices down 6.3% year-on-year. Northern Ireland remained the best performing region, but still falling 1.8%.
Wales experienced a sharp slowdown, changing from -5.4% to 1.4% last quarter. Scotland also saw a slowdown in growth from -4.2% to -1.5%.
Across northern England (North, North West, Yorkshire & The Humber, East Midlands, and West Midlands) saw prices down 3.9% compared to the same period last year. With an annual rate change of -3.3% to -2.0%, The North prevailed as the strongest performing northern region, while the east Midlands was the weakest, declining 5.5%.
Southern England (South West, Outer South East, Outer Metropolitan, London, and East Anglia) saw a 4.8% year-on-year drop. London, as expected, was the best performing region despite a 3.8% annual decline.
Stay in the know
If you’re planning to buy or sell property this year, check back monthly for our regular update on the nation’s property prices and contact one of our advisers for personalised advice.
Figures quoted from Nationwide House Price index – September 2023.
If you’re planning to buy or sell property this year, contact an advisor for personalised mortgage advice.
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