Figures from Land Registry show that England had the weakest growth in the UK, with Welsh house prices up 2% annually and Scotland’s at 1.3% against England’s 1.1%.
Some experts called the rise “encouraging”, but others noted that sales volumes were significantly down, with a 5% drop in transaction volumes.
Tomer Aboody, director of specialist lender MT Finance, said: “We have seen a lack of desire from the government to help kick-start or boost the property market, and if anything, they have created even tougher conditions.
“Real estate is the lifeblood of the UK economy, and until this is boosted, we will continue to see not only a stagnant property market, but also a stagnant economy.”
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‘Sepia-tinted snapshot’
The Office for National Statistics (ONS) figures show a market before the war in Iran, leading to some saying that they now provide no guide to future performance, especially given the rapid repricing of mortgages in recent weeks.
Jonathan Hopper, CEO of Garrington Property Finders, said: “This January data gives a sepia-tinted snapshot of a market in transition.
“If the conflict proves short-lived, the market may simply resume the slow normalisation captured by this January data. If it is prolonged, uncertainty over interest rates and the wider economy could extend the transitionary phase, keeping buyers selective and price-sensitive for longer.”
Karen Noye, mortgage expert at wealth manager Quilter, said the mortgage market was already weakening before the war.
“Monthly momentum had already slipped, with prices falling 0.3% between December and January, suggesting the market was softening even before lenders were forced to rebase fixed rate products in response to the geopolitical shock this March,” she added.
Regional disparities
The headline figures masked wide regional differences in house price direction.
London saw the biggest monthly movement, with a 0.8% month-on-month increase. However, the capital also saw the biggest annual decrease in prices at 1.7%. Meanwhile, house prices in the North West of England were up 3.1% year-on-year but down 0.8% in the month. The biggest monthly fall in prices was in the North East of England, with a 2.8% slip.
Chris Storey, chief commercial officer at Atom Bank, said there was also a disparity in the performance of types of property on the market.
“Rightmove last week reported the price gap between typical first-time buyer properties and larger homes has reached a record high, making it far harder for homeowners to move up the ladder. Meanwhile, potential first-time buyers face a real battle to save a decent deposit, given the continued cost-of-living pressures putting every penny under pressure.
“Throw in the volatile mortgage market, where lenders are being forced to reprice and adapt their ranges due to the impacts of geopolitical events, and buyers face an even more stressful experience than usual,” he noted.
