The latest House Price Index from the Office for National Statistics (ONS) and Land Registry reveals that the average house price stood at £226,000 in November, for which the most recent figures are available.
On an annual basis, the average house price rose by 5.1% in November – down from 5.4% in October. The annual rate of growth has slowed since mid-2016, but remained broadly around 5% during 2017.
November’s average house price of £226,000 was £11,000 higher than in November 2016 and unchanged on the previous month.
The main contributor to the increase in average house prices in November came from England, where house price growth stood at an average of 5.3%, taking the typical property value to £243,000. Wales saw house prices rise by an average of 4.5% over the 12 months to November, to reach £153,000. In Scotland, average house price growth stood at 3.6% in the year to November, taking the typical value to £146,000. The average house price in Northern Ireland stood at £132,000 in the third quarter (Q3) of 2017, following a 6% annual increase.
On a regional basis, London continued to boast the highest average house price, at £482,000, followed by the South East and the East of England, at an average of £325,000 and £290,000 respectively. The lowest average house price continued to be found in the North East, at £128,000.
The West Midlands recorded the highest annual growth in November, at an average of 7.2%. This was followed by the East Midlands (6.4%), and the North West and South West (6.2%). The lowest annual growth was in London and the North East, where prices rose by an average of 2.3% over the 12 months to November, followed by Yorkshire and the Humber, at an average of 3%.
The local authority showing the largest annual growth in the year to November was Cambridge, at an average of 16.4%, taking the typical value to £462,000. The lowest annual rate of growth was recorded in Na h-Eileanan Siar, where house prices fell by an average of 11.3%, to stand at £94,000.
Average House Price Stood at £226k in November, ONS Reports
Low numbers of sales transactions in some local authorities and London boroughs, such as Na h-Eileanan Siar and the City of London, can lead to volatility in the series. Whilst efforts are made to account for this volatility, the change in price in these local levels can be influenced by the type and number of properties sold in any given period.
In November 2017, the most expensive borough to buy in was Kensington and Chelsea, where the average home cost £1.3m. In contrast, the cheapest area to purchase a property was Burnley, at an average cost of £79,000.
Ishaan Malhi, the CEO and Founder of online mortgage broker Trussle, responds to the index: “Those looking to get onto the property ladder should see the current slowdown in price growth as an opportunity to buy. With interest rates still extremely low and the recent changes to Stamp Duty, first time buyers are arguably facing better conditions than they have for some time.
“However, affordability is going to be an issue for many. Wage growth has failed to keep pace with inflation, so saving for a deposit is going to be that bit harder. Nevertheless, with many parts of the UK now seeing house price growth begin to level off, what was once an almost impossible task is getting a little easier, and this trend should continue over the coming months.”
The Founder and CEO of online estate agent Emoov.co.uk, Russell Quirk, also comments: “Although house prices are still up annually, a combination of seasonality and a subdued level of buyer interest has resulted in the market running lower on steam compared to previous months.
“There are swathes of the UK market that will have seen the value of their property fall or at least plateau over the last year, particularly those at the top end of the market and across the capital’s more prestigious boroughs. However, the market has been propped up for the large part by the UK’s more affordable areas, where the marginal reduction in property values has done little to deter the everyday buyer and seller.
“While many have been quick to predict doom and gloom scenarios as a result of slower market conditions, these predictions are perhaps a tad overstated and this gradual, more natural adjustment to the UK market is far more palatable than another market crash.
“A reduced pace of price growth will no doubt be welcomed by those priced out of homeownership, but these slower market conditions aren’t enough to address the wider issue of affordability, or indeed the severe lack of housing stock.
“With a heightened level of buyer interest already returning to the market in 2018, it is likely that an air of stability will soon follow and the lack of housing stock to satisfy this demand will raise the bar of unaffordability even further.”
Richard Snook, the Senior Economist at PwC, gives his thoughts: “In the first housing release of 2018, data from the ONS and Land Registry shows a fairly benign picture in the market.
“House price inflation dipped to 5.1% in the year to November, but there was a big upward revision to the October data from 4.5% to 5.4%, due, in part, to a change in how the figures are calculated. Taken together, these alter the recent story from one of a deteriorating market, to one that appears relatively stable. The price of a typical UK house was £226,000 in November 2017, from £225,700 in October.
“Continuing the recent regional trend, London is the weakest performer. House prices have now declined for four consecutive months, from the high of £490,000 in July to £482,000 in November. But, due to growth earlier in the year, prices are still 2.3% higher than 12 months ago.”
John Eastgate, the Sales and Marketing Director of OneSavings Bank, reacts to the figures: “A slowdown in house price growth might seem, on the face of it, like good news for those currently locked out of the market, but, for most, it will fall on deaf ears. Affordability is still a huge challenge for aspiring homeowners, who are having to tighten their belts in response to high inflation and prolonged wage stagnation, and with less money to save, fewer people will be in a position to buy. This dampening of demand would normally keep a lid on house price growth, but we may yet see a spike in transactions resulting from the recent cut to Stamp Duty for first time buyers, which could push prices up above trend in the near term.”