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UK house prices rose 6.3% in January over a 12-month period, according to HM Land Registry’s latest monthly house price index.

UK house prices rose 6.3% in January over a 12-month period, according to HM Land Registry’s latest monthly house price index.

This continues the picture of slowed growth, following an annual 9.3% rise in the December figures.

The new average UK house price is recorded as £289,819 in January, which is £17,000 higher than a year ago, but just over £4,000 less than December. This represents a 1.1% decrease between December and January (not seasonally-adjusted), following a 0.4% decrease in December.

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This picture varies across the countries, with average house prices rising 6.9% to £310,000 in England, 5.8% to £217,000 in Wales, 1% to £185,000 in Scotland and 10.2% to £175,000 in Northern Ireland.

Of the English regions, the highest annual percentage change was in the North East at 10%, compared to the lowest in London at 3.2%.

The overall annual decline has been attributed to a fall in average UK house prices in January 2023, compared with a rise in January 2022.

House Buyer Bureau managing director Chris Hodgkinson comments: “We’re now seeing the monthly rate of house price decline seen since September of last year start to accelerate and this demonstrates the increasingly difficult landscape that buyers are negotiating when looking to purchase.

“This reduction in prices is being largely driven by mortgage-backed homebuyers who are no longer able to offer the high asking prices seen during the pandemic boom and are having to adjust their position in the market accordingly.”

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

Alliance Fund chief executive Iain Crawford says: “It’s certainly a tale of two markets at present, with uncertainty shrouding the existing market and driving a topline month-on-month house price decline, while the new-build market continues to move at a rate of knots.

“The average price of a new-build property increased by 6.7% in January alone, up 22.3% annually, and this demonstrates the continued strength of the new homes sector when compared to the wider market.”

Meanwhile MT Finance is calling for measures to stimulate the market.

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MT Finance director Tomer Aboody says: “The market may benefit from further stimulation, perhaps in the form of the reworking of stamp duty. Banks remain keen to lend and many buyers still want to make a move, so such an impetus may persuade them to take the plunge.”

All eyes are now focused firmly on tomorrow’s Bank of England base rate announcement.

Octane Capital chief executive Jonathan Samuels comments: “The general consensus is that we will see yet another base rate increase tomorrow, albeit a potentially smaller jump than previous hikes, and so the cost of climbing the property ladder looks set to get that little bit more expensive.”

By Linda Ram

Source: Mortgage Finance Gazette

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