ONS May HPI – “Vendors operating in the real world”

ONS May HPI – “Vendors operating in the real world”

House price growth in the UK has slowed from a 5.3% year on year pace in April to 4.7% for May.

Where the average price of a home in the UK in May was £221,000, more than a year ago it would have been £10,000 less, and £1000 more, than in the previous month.

Even though the price index has been on a declining trend since mid-2016, year-to-date it had been widely stable at around 5% according to the Office for National Statistics.

Rising by 5% over the past year to £238,000, prices in England registered the largest increase.

Whilst in Wales, they rose to 3.8% to £150,000 and in Scotland by 3.5% to £143,000. Northern Island saw a slightly larger increase, where prices grew 4.3% to £124,000. 

London continues to have the most expensive homes, with the average price of £481,000, and the North East at £127,000 the least.

Vendors are facing a reality check when they are hitting the market with their overambitious ideas of home values. Those who are prepared to make an offer are becoming increasingly determined to bargain on prices.

Lucy Pendleton, Founder Director of independent estate agents James Pendleton, comments.

“Prices continue to edge down slowly but activity levels remain strong.

“The reason for this is that the Mexican stand-off between buyers and sellers has failed to materialise.

“Most vendors are operating in the real world and are prepared to accept a realistic market price. This is keeping the market fluid.

“The gradual softening in prices we are seeing will ensure the market avoids a sharper correction.

“With supply so low and demand still robust given low mortgage rates and strong employment, prices certainly won’t be going off a cliff edge.

“That London’s annual price growth was second from bottom regionally is understandable given the sharp growth of recent years.

“Prices are coming down to more realistic levels of their own accord and in many areas, particularly the capital, this will have a restorative effect on the market longer term.

“Where demand has dropped off sharply is among landlords and at the higher end of the market, especially in the capital.

“Here, changes to buy-to-let taxation and stamp duty have had a far greater impact on the property market than Brexit.

“Thankfully, due to Help to Buy and the Bank of Mum and Dad, first time buyers are increasingly taking up the slack.”

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