House prices grow for first time since last summer

UK house

The house price index was up 1.8% for March, as per the ONS, much higher than the 0.1% expected and a swing from a 0.2% drop the month before

Official UK house prices have returned to growth on an annual basis for the first time since last summer, helped by the strongest monthly gain since in nearly two years.

The house price index was up 1.8% for March, as per the ONS, much higher than the 0.1% expected and a swing from a 0.2% drop the month before.

The unadjusted official house price index increased by 0.7% month-to-month in March. In seasonally adjusted terms, prices rose by 1.1% month-to-month, the strongest gain since July 2022.

Rents rose by 8.9% on average in the 12 months to April 2024, down from the record high of 9.2% in the 12 months to March 2024.

In England, average rents rose 8.9% to £1,293, in Wales they were up 8.2% to £730 and up 10% in Scotland to £952, with Northern Ireland up 10.4%.

ONS chief economist Grant Fitzner noted: Average UK house prices grew over the year for the first time since last summer.

House prices saw an annual increase in every nation and region, except London and the South East, with Scotland seeing the fastest annual growth, he said.

After two years of unprecedented and generally accelerating annual growth, private rental price gains showed tentative signs of easing. Most nations and English regions saw a downturn, with a notable easing in London, Fitzner added.

The official house price index lags other available measures from lenders Nationwide and Halifax because it measures prices at the mortgage completion stage, compared to mortgage approvals.

The rise in the official price index, therefore, shows what was happening a couple of months ago in the housing market, when mortgage interest rate drops in the early months of this year fed through to soaring buyer interest, according to economists at Pantheon Macroeconomics.

They added: With indicators from earlier in the purchase process suggesting price gains have cooled as markets have re-evaluated how rapidly the Monitory Policy Committee will cut interest rates, the gains in the ONS index will likely slow in the coming months.

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