Housing Market Trends: April 2023 Analysis

Even estate agents need help working out the housing market's current state.

Asking prices have dropped - but only by the merest fraction that makes little or no difference.

Meanwhile, mortgage interest rates are rising but show no impact on buyer demand.

The latest official data from the Office for National Statistics (ONS) reveals house prices were up 3.5 per cent in April 2023 - but still increasing at a lower rate than March’s 4.1 per cent rise.

Trying to figure out how the market is moving needs to be clarified.

The ONS says the average home was worth £286,000 in April 2023 - up £9,000 in 12 months, but the April figure is also £7,000 lower than the year’s peak of £293,000 in September 2022.

Asking prices down a fraction

Property portal Rightmove reports asking prices fell by a mere £82 in June to £372,812. However, this was a notable first drop in asking prices since September 2017, and the portal predicts the usual summer slowdown has started early.

“Average new seller asking prices, the first and leading indicator of new trends in the market, have dropped slightly this month, signalling that the belated spring price bounce has quickly turned into an earlier-than-usual summer slowdown,” said a Rightmove spokesman.

“We expect asking prices to edge down during the second half of the year, which is the normal seasonal pattern, and while we sometimes re-forecast our expectations for annual price changes at this time, current trends suggest that our original forecast of a 2% annual drop in asking prices at the end of 2023 is still valid.”

How house prices have changed where you are

Prices are rising the fastest in the North East, where landlords and other homeowners saw a 5.5 per cent increase across the year. London saw the lowest annual price increase of 2.4 per cent.

Despite the lowest house price rise, houses in London are still much more expensive than those in the rest of the country—prices in the capital average £533,687. The cheapest homes are in the North East, where costs average £159,900.

What do the agents and lenders say?

Some mixed messages come from the headquarters of the country’s banks, building societies and estate agents.

Reporting to the Royal Institution of Chartered Surveyors (RICS), estate agents confirm the market appears to be strengthening as agreed sales increase and business is steady.

They feel new instructions are increasing, with a 14 per cent rise in May breaking a 13-month run of negative figures.

Lender, the Halifax director Kim Kinnaird, explained house prices in May were essentially unchanged, with prices dropping a marginal one per cent.

Like the ONS, the lender confirms prices are steady, with the cost of an average home up £5,000 in a year and £25,000 more than two years ago.

Kinnaird said: “The brief upturn we saw in the housing market in the first quarter of this year has faded, with the impact of higher interest rates gradually feeding through to household budgets, particularly those with fixed rate mortgage deals coming to an end.”

Reports from another of Britain’s largest mortgage lenders, Nationwide, show prices reduced by 0.1 per cent between April and May and 3.4 per cent in the year to April.

Chief economist Robert Gardner said: “Recent Bank of England data had shown some signs of recovery in housing market activity, although the number of mortgages approved for house purchase in March was still around 20 per cent below pre-pandemic levels.”

House price digest FAQ

The figures for average house prices and movements in property values can be confusing if you need to learn how to read the data.

Here are some of the most asked questions about house price indices.

Why are the average property prices different in each report?

The reports use different data to draw conclusions and take the data from different periods.

Nationwide and Halifax base their indices on customer data, which are much smaller samples than the national data analysed by the ONS.

Acadata's methodology includes analysis that no other index uses.

Each organisation collects data over different periods, making a direct comparison difficult.

What is the average house price?

There's no such thing as an average home. The figure is calculated from the total value of all transactions in the sample divided by the number of homes changing hands.

What are the asking and sale prices?

The asking price is the amount an owner wants to achieve from a house sale, while the sale price is the negotiated amount the buyer pays.

Which house price index is the best?

All have flaws because of the restricted data, but the one with the broadest sample comes from the ONS. Unfortunately, the ONS data is usually the last to market and out of date by two to three months on publication.