ONS House Price Index: Nick Leeming, Chairman of Jackson-Stops

Nick Leeming, Chairman of Jackson-Stops, comments on the latest ONS House Price Index:

“Although house price growth remains in today’s ONS figures, growth is starting to slow as the statistics move closer to Christmas. Momentum is likely to remain subdued until the beginning of 2023 as part of a seasonal drop in activity levels combined with the continued effects the mini-Budget and rising interest rates. Having said that, today’s data offers an overall resilient picture for the market, with average house prices increasing by 12.6% over the year to October 2022, up from 9.9% in September 2022, underscoring the significant leap in housing wealth the UK has witnessed in a very short amount of time. In October 2020, the average UK house price was £245,000, by October 2021 this had risen to £268,000 and now the average UK house price stands at £296,000, which shows the continually strong position sellers currently find themselves in.

“Reflecting today’s market, Rightmove’s most recent statistics look promising, reporting buyer enquiries up 4% nationally on the same period in 2019, and website activity also up 11% on last year, indicative of many ready-to-go buyers waiting in the wings. Thanks to a combination of low housing supply, high levels of housing equity and a high proportion of fixed-rate mortgages, a soft landing for house prices appears likely in the first quarter of 2023.

“Across our national network of Jackson-Stops offices, agents are seeing asking prices begin to stabilise as buyer demand falls in line with normal levels that we could have expected pre-pandemic. Analysis of our own data shows that instructions are up year on year from 2021, showing that buyer appetite is sustaining. Looking ahead, house values next year are likely to feel much more dependent on the slightest variables, from the perfect location to pristine finishes, without the backdrop of unprecedented demand to wipe away any such compromises. For a seller to command the best price, they must now be aware of more choice than we’ve seen in the past 18 months, making a purchasing decision all the more discerning and negotiations likely. Yet, at the higher end of the market, where sellers will have more equity to buy with, and are broadly immune from mortgage rate rises or affordability pressures, the market remains as open as ever and activity levels will be sustained.”