House Price Growth Nears Zero
House Price Growth Nearing Zero
Welcome back to EO Estate Agent’s market update, based on data from August 2023.
Six months ago, in March 2023, house price growth was sitting at 5.3%, which was low compared to elevated 2022 figures but in a continuous decline. Now, they sit at 0.1% compared to 5-year averages across the UK. In London, this number falls into the negative: -1%.
This drastic change in house price growth is brought about by the consistent increases in the Bank of England’s base rate over the last few months. It currently sits at 5.25% but is expected to increase once more and then peak. Rates are only expected to come down in 2024-2025. Even then, mortgage rates are unlikely to dip below 4% in the immediate future.
Dip In Mortgage Purchases
Mortgage purchases make up the large majority of sales in any given year. They are currently 28% lower than they were last year and there is a 21% decline in completions in 2023 compared to 2022.
Overall stock is up 16%, while demand is down 34%. The difference between these two figures means we have transitioned into a buyer’s market, and this is driving the stagnating house price growth.
House price growth and completions are the lowest they have been since 2012.
Renting Cheaper Than Buying
Renting, on average, is 10% cheaper than mortgage repayments, after many years of the opposite being true.
However, motivated vendors who are willing to be flexible on their asking price will still be able to find their buyers. Especially as increasing wages boost affordability, with the average UK home down to 6.3 times the average annual earnings.
We will be back with another market update soon. Until then, we wish you all the best.
Luiz De Souza | EO Estate Agents