The annual percentage change slowed this month because UK house prices rose sharply in September 2021, which coincided with changes to Stamp Duty Land Tax. UK house prices remained unchanged between August and September 2022; this also caused the annual percentage change to slow.
The average UK house price was £295,000 in September 2022, which is £26,000 higher than this time last year, and unchanged since August 2022.
Average house prices increased over the year to £314,000 (9.6%) in England, to £224,000 in Wales (12.9%), to £192,000 in Scotland (7.3%) and to £176,000 in Northern Ireland (10.7%).
Matthew Thompson, Head of Sales at Chestertons, says: “The expectation that London’s property prices could see an adjustment led to an uplift in buyer demand across the capital in September. Compared to August, there were 17% more buyer enquiries in September and 18% more viewings. We were also encountering an increasing number of house hunters who wanted to secure a property as soon as possible and take out a fixed-rate mortgage.
"This contributed to September’s property market remaining busy and competitive. Due to the cost of living crisis, some buyers began compromising on their priorities in order to secure a property under their initial budget.”
Nathan Emerson, Propertymark Chief Executive, said: “Things are changing, and our members are seeing a steady shift back towards a buyers’ market with the biggest proportion of sales now being agreed at asking price or below.
“Demand is continuing to outpace supply and despite buyers negotiating harder with higher borrowing rates to consider, realistically priced homes are still selling.”
Conor Murphy, Chief Executive Officer, Smartr365, comments: “Despite recent headlines, buyers, sellers, advisers, and lenders all remain committed to pressing ahead with sales. This steady demand is supported by falling swap rates and average interest rates. Some 2 and 5-year fixed rates are priced between 4 and 5%, down from the 6%+ seen in recent weeks.
“The hope is that tomorrow’s Budget also brings clarity and stability to the wider economy, in turn supporting the housing sector. First-time buyer demand has already been recently supercharged by the Stamp Duty Land Tax cuts confirmed last month, whether it gets a further boost tomorrow remains to be seen.
“What is certain though is the need to digitise and streamline the homebuying process, reducing admin, time, and stress for all parties. If brokers haven’t already integrated tech tools into their everyday work, they are a step behind competitors. There is no need to rely on photocopied ID or paper fact finds in 2022.”
Jean Jameson, Chief Sales Officer at Foxtons, said: “In our local offices, we have seen more caution from our customers as they choose between buying an asset at a higher rate and dealing with record-breaking rent in the lettings market. However, London is insulated by its international appeal, and house prices have remained high here.
"As Help to Buy finished in October, our New Homes team have seen developers re-focus on the investor market, with increasing demand from overseas investors due to the exchange rate. Foxtons Private Office, whose clientele includes domestic buyers in international business as well as international investors, have seen higher volumes of property going under offer this October than in 2021.”
Andy Sommerville, Director at Search Acumen, comments: “Today’s data is further evidence of a turning tide for house prices, reflecting the same pattern of declining growth we have started to see emerge over the last two months. As the impacts of previous rate rises and inflation filter through into house prices over the coming months, we’d expect to see further declines coming down the tracks.
“Homeowners will naturally be concerned about what this means for them but can take comfort from the government’s return to more traditional economic approach, which is likely to continue to stabilise the mortgage markets. The Bank of England indicated last week that a continued rapid ratcheting up of the base rate in 2023 would be unlikely, so this suggests that fears around runaway mortgage rates creating a demand cliff edge will not now come to pass, protecting homeowners from more severe declines in asset values.
“While demand will likely decline further as we enter a period defined by a painful combination of recession and high inflation, pressure on existing property transactions will only increase. If a forecast peak-to-trough 8% dip in prices becomes a reality over the coming year, lenders and selling agents will be under pressure to push sales through quickly or risk down valuations, renegotiations and fall-throughs.
“This is happening at the same time as we anticipate significant spending cuts to already over-stretched government departments. In the housing market, this could mean further delays in processing property transactions which are already massively backlogged, making the stakes much higher and increasing transaction costs at a time when people can least afford it, especially sellers who might already be taking a hit on their valuation.
“Given these pressures, how the market fares in the months ahead will be defined by how well it learns the lessons of the pandemic and continues to invest in innovation as a tool for efficiency and cost saving in challenging times. We already have the technology to digitise property data and automate the transaction process through AI, taking tasks that took weeks and cost thousands of pounds, and delivering them in seconds for half the price. As Britain’s recession becomes reality, now more than ever the property sector needs to embrace technology to future-proof businesses, keep markets moving, and support everyday buyers and sellers facing significant financial pressures.”
