The UK’s house prices stall – but rents rise

The UK’s average house price increased by 9.5% over the year to September, down from 13.1% in August, data from the Office for National Statistics (ONS) reveals.

The latest house price index shows the annual percentage change slowed because house prices rose sharply in September 2021, which coincided with changes to Stamp Duty Land Tax.

However, house prices remained unchanged between August and September 2022, which has also had an impact on September’s fall in prices.

The average UK house price was £295,000 in September, which is £26,000 higher than this time last year, and unchanged since August.

Average house prices increased over the year to £314,000 (9.6%) in England, to £224,000 in Wales (12.9%), to £192,000 in Scotland (7.3%) and £176,000 in Northern Ireland (10.7%).

Data on the UK’s private rental prices

The ONS has also published data on the UK’s private rental prices which show that rents in the year to October rose by 3.8%, up from 3.7% in the 12 months to September.

Annual private rent prices increased by 3.7% in England, 3.2% in Wales and 4.2% in Scotland.

The East Midlands saw the highest annual percentage change in private rental prices (4.8%), while London saw the lowest (3.0%).

The data from ONS also shows that UK rental prices have increased by 15.6% since January 2015.

The latest ONS house price index

Commenting on the latest ONS house price index, Nathan Emerson, Propertymark’s chief executive, said: “Things are changing, and our members are seeing a steady shift back towards a buyers’ market with the biggest proportion of sales now being agreed at asking price or below.

“Demand is continuing to outpace supply and despite buyers negotiating harder with higher borrowing rates to consider, realistically priced homes are still selling.”

On the index of private housing rental prices, Mr Emerson added: “The solution to rising rents is simple: give tenants more choice.

“The private rented sector needs more landlords and the best way to achieve that is to recognise them as the important housing providers they are.”

He added: “Rising buy-to-let mortgage costs are wiping out returns that have already taken a hit as a result of a mounting tax and regulatory burden.

“Proposals to make it difficult to get a property back if a tenancy goes wrong are proving to be the final straw.

“We think a fairer tax regime would make it an attractive investment again.”

Lettings market is unseasonably busy

Gareth Atkins, the managing director of lettings at Foxtons, said: “The lettings market is unseasonably busy.

“So far, we aren’t seeing the typical slowdown we’d expect around the holiday season.

“The remarkable lack of stock may be to blame, at 30% lower year to date than in 2021.”

He added: “Not only are landlords dealing with rising buy-to-let mortgage rates, but renters also who would have become first-time buyers are more likely to remain in the rental market.”

‘Rents are rising at a time when incomes are being squeezed’

Avinav Nigam, co-founder of residential investment platform IMMO, which plans to spend £1bn retrofitting more than 3,000 homes for rent in the UK, said: “Each rental index shows a different level of growth, but the underlying story is clear: rents are rising at a time when incomes are being squeezed.

“While house prices are taking up all the headlines, we are facing a very real affordability crisis in the private rented sector, as people are struggling to make ends meet.

“A weakening for-sale market will only add further pressure on rental housing and renters, as buyers put off their plans and opt for rented accommodation instead, increasing competition for properties in a supply-starved rental market.

“With the government’s policies hurting landlords it’s driving many buy-to-let investors out, we’re facing a perfect storm of rising rental demand and falling supply leading to high rental price growth.

“The big question is who fills the gap left by private landlords? Given the current climate, it won’t be first-time buyers snapping up these homes.”

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