ONS Records Slump In Rate Of House Price Growth
- Anna Clare Harper
- Aug 9, 2023
- 1 min read
House prices £285,861, representing growth in the year to May 2023 of 1.9%.
This significant slowdown in growth is a direct result of increased interest rates, which have stretched housing affordability.
Higher interest rates impact those who already own a property: many are facing double or triple their previous housing costs.
It also impacts new purchasers as those reliant on bank finance are no longer willing or able to pay the price level we adjusted to in 2022. Only cash purchasers are not directly affected.
The impacts are being felt keenly by homeowners and investors alike for new purchases. Sales volumes have fallen by about a third in the last year. Investors we are working with are purchasing at 20-30% below peak 2022 market values, and only those who need to sell in this market are selling.
However, it is worth noting that this is a price correction following the mini bubble caused by Covid and Stamp Duty Land Tax reductions, which created double digit house price growth for much of the last three years. As a result, it is a time for homeowners and investors to review their affordability and mortgage terms and plan for the future, but not a time to panic.
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