The Office for National Statistics (ONS) house price index for May revealed in monetary terms, the average house price in May was £6,000 higher than last year but £7,000 below the peak of September 2022.
Average house prices were up by 1.9 per cent on an annual basis, down on the 3.2 per cent annual growth recorded in April.
Chris Hodgkinson, managing director of House Buyer Bureau, said it had been widely predicted that the housing market would see a standstill.
“House prices aren’t crashing by any means, but a drop in market activity has also caused them to stall.
For those who are looking to sell, a good price is still very achievable. It’s finding a buyer who is in a proceedable position, that is the biggest challenge at present,” he added.
A needed price correction
Malcolm Webb, technical director at Legal and General Surveying Services, said UK house prices had “enjoyed decades of growth” and reached record highs, so any drop should be seen as a “levelling out” in prices.
Stephen Perkins, managing director at Yellow Brick Mortgages, said: “The UK residential property market will see a much-needed price correction during the second half of the year. This data is just the start.
“With lots of properties coming to market and fewer buyers able to afford them due to mortgage rates and other cost-of-living pressures, it is now very much a buyers’ market, with plenty of properties to choose from, and those most keen to sell are likely to reduce their asking price to secure a buyer.”
Regional and country differences
Scotland recorded the highest annual rise in average house prices with a 3.2 per cent increase to £192,518. On a monthly basis, this was three per cent higher than the month before.
In England, average house prices rose by 1.7 per cent over the year to £303,557 and compared to April this was 0.4 per cent down. Wales recorded a 1.8 per cent uptick in average house prices to £213,374 and a 0.6 per cent increase on the month before.
In Northern Ireland, where house price changes are recorded on a quarterly basis, there was a five per cent annual increase in house prices. The average house price in Northern Ireland stood at £172,005 which was 1.8 per cent lower than the previous quarter.
Within England, house prices in the North East recorded the strongest yearly growth at four per cent to £158,779. This was a one per cent fall on the month before. The lowest annual growth was seen in the East of England, where average prices saw a zero per cent change and a 0.8 per cent decline compared to the month before.
Property and buyer status
Detached homes recorded a 2.3 per cent annual increase in average prices to £449,975, while flats and maisonettes reported an equivalent rise to £231,404.
The average price of semi-detached properties rose by 1.4 per cent to £274,943 and terraced homes saw a 1.6 per cent increase in average prices to £233,140.
The average price a first-time buyer paid for their home rose by 1.9 per cent annually to £238,092, while former owner-occupiers saw an equivalent increase to an average value of £334,499.
On a monthly basis, the average price paid by first-time buyers rose marginally by 0.2 per cent and the average price paid by former homeowners dipped nominally by 0.2 per cent.
