The Office for National Statistics (ONS) has published its latest House Price Index for June 2023. It’s figures are relating to some months ago and are subject to future adjustment but they show the general trends in the market from much earlier in the year.

Average house prices in the UK increased by 1.7% in the 12 months to June 2023, down from 1.8% in May 2023.

At the country level, the highest annual house price percentage change in the 12 months to June 2023 was recorded in England, where house prices increased by 1.9%.

Scotland saw house prices saw no change (0.0)% in the 12 months to June 2023.

Wales saw house prices increase by 0.6% in the 12 months to June 2023.

Northern Ireland saw house prices increase by 2.7% over the 12 months to Quarter 2 (April to June) 2023.

Comparing the provisional UK HPI volume estimate for April 2022 with the provisional UK HPI volume estimate for April 2023, volume transactions decreased by 25.3% in England, decreased by 18.6% in Scotland and decreased by 26.4% in Wales.

The industry gave its reactions…

Jonathan Rolande, spokesman for the National Association of Property Buyers:

“It’s important to remember that the average house sale takes around three months to complete, from the time a sale is agreed. That means that the latest ONS figures for June 23 show many transactions for property that were put on to the market in the first months of the year. There have been four base rate rises since then, each one reducing the affordability for millions of buyers.

“Inflation is coming down, reducing pressure on interest rates but we will only see the possible benefits of this in ONS figures well into 2024.

“In the meantime, we should brace ourselves for bad news from the ONS in the final months of the year as they will then reflect what has happened to the market after the full effect of inflation and rate rises has been felt.

“We are now right in the middle of the scales – prices £5000 more than a year ago but £5000 less than in November. Expect them to continue their negative dip well into next year.”

“Optimists beware – these figures are based on completions of sales that were agreed months before. The market is tough and future ONS reports will inevitably paint a worsening picture.”

Jason Tebb, Chief Executive Officer, OnTheMarket.com:

“This data is a little historic but shows the continued, gentle slowdown in annual price growth in June, with the average property price still £5,000 higher than a year ago.

“The housing market continues to show remarkable resilience considering the economic uncertainty. News of a further fall in inflation should provide some reassurance, although while it remains some way off the 2 per cent target, further rate rises can’t be ruled out.

“With affordability a challenge for many buyers relying on mortgages after consecutive interest rate rises, sellers keen to transact in a timely fashion must price carefully.”

Matt Thompson, head of sales, Chestertons:

“Although there still is a vast number of buyers wanting to move as soon as possible, rising interest rates have forced some house hunters to be more cautious, review their financial situation and calculate a more conservative budget.

“Whilst this resulted in fewer new buyers entering the market in June, we expect activity to pick up again once buyers have adjusted their criteria and lenders are bringing more products to the market again.”

Nathan Emerson, CEO of Propertymark:

“The housing market remains strong for both buyers and sellers. Sellers are making a gain on their property price compared to this time last year, and buyers are still able to negotiate to find a middle ground.

“After positive inflation news has bought the potential for a peak in interest rates sooner than previously expected, there is also some hope that fixed mortgage rates will start to fall. Even as they remain high compared to recent standards.”

Marc von Grundherr, director of Benham and Reeves:

“Another index and yet further evidence that while the market may be subdued at present, it’s far from teetering on a cliff edge. In fact, house prices have continued to creep ever higher and while marginal, it’s important to remember that this growth comes in addition to the pandemic highs seen last year.”

Iain McKenzie, CEO of The Guild of Property Professionals:

“In the face of less-than-ideal conditions for buyers, encompassing surging mortgage rates and unyielding inflation, their determination is unwavering. Continuing buyer demand is proving instrumental in holding up the market and keeping property prices buoyant.

“In the wake of the Bank of England’s most recent 0.25% base rate hike to 5.25%, the highest since the 2008 financial crisis, the economic horizon remains uncertain, yet signs of stability are emerging. Better-than-expected inflation figures have prompted lenders to lower rates, offering a welcome respite to first-time buyers and those nearing the end of fixed deals.

“With the added news of July’s inflation decrease, the strain on personal finances is showing signs of easing, potentially allowing budgets to stretch further.

“This may offer a lifeline to aspiring homeowners, empowering them to save more for that crucial first step onto the property ladder.”

Tom Bill, head of UK residential research at Knight Frank:

“Strong wage growth is normally a positive sign for the UK property market, but in 2023 it will keep interest rates higher for longer, which will hurt demand. Some lenders are cutting rates but this week’s stubbornly-high core inflation figure shows the pressure on anyone buying or re-mortgaging won’t relent any time soon.

“While we expect UK prices to fall by 5% this year, demand should prove more resilient than expected given the shock-absorber effect of strong wage growth, lockdown savings, the availability of longer mortgage terms, flexibility from lenders and the popularity of fixed-rate deals in recent years. Long-standing affordability constraints mean that London continues to underperform and the gap between the capital and the rest of the country has become slightly less pronounced.”

The ONS also published its latest Index of Private Housing Rental Prices.

Private rental prices paid by tenants in the UK rose by 5.3% in the 12 months to July 2023, up from 5.2% in the 12 months to June 2023.

Annual private rental prices increased by 5.2% in England, 6.5% in Wales, and 5.7% in Scotland in the 12 months to July 2023.

Within England, the highest annual percentage change in private rental prices in the 12 months to July 2023 was in the West Midlands, Yorkshire and the Humber, and London, at 5.5%, while the North East saw the lowest (4.6%).

London’s annual percentage change in private rental prices was 5.5% in the 12 months to July 2023, above the England average and its highest annual rate since the London data series began in January 2006

Sarah Tonkinson, Managing Director of Institutional PRS and Build to Rent at Foxtons:

“July’s market experienced a rise in activity that always comes with peak lettings season; demand increased 13%. This period always sees a flurry of activity as families move to London, new graduates head for London workplaces and the student population make plans for the coming academic year. The good news for renters is that there is 6% more stock available compared this this time last year, but competition is still fierce for quality properties and allowing enough time for your search is still key!”

Nathan Emerson, CEO of Propertymark:

“There is a huge disparity in the number of properties available to rent compared to the continuously growing number of renters looking for a home, ultimately continuing to put pressure on rent prices.

“UK Governments need to urgently address the problem and look to adequately incentivise the provision of desperately needed homes rather than forcing landlords out of the private rented sector with unfair regulatory and financial hurdles.”

Gareth Atkins, Managing Director of Foxtons Lettings:

“As our market research predicted at the start of 2023, price increases in the lettings market are less extreme than we saw last year. We’ve seen expected growth and are now into a more consistent busy market we normally see at this time of year. As such, the market will remain highly competitive through summer. This July, as the seasonal rush began, there was an average of 21 renters registering per each new instruction in London.”