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Average UK house price dipped to £287,506 in February

 house price Clapham, London, Lavender Gardens SW11, a row of large brick terrace houses, Victorian style 19th Century architecture,  copy space with clear blue sky, church tower in the distance, no people
Annual rate of house price growth slows as rental price increases accelerate. Photo: Getty

The average UK house price increased by 5.5% in the 12 months to February 2023, slowing from 6.5% in January 2023, the Office for National Statistics (ONS) said.

The typical property value was £288,000 in February, which is £16,000 higher than 12 months earlier, but £5,000 below a recent peak in November 2022.

Average house prices increased over the 12 months to £308,000 (6.0%) in England, £215,000 in Wales (6.4%), £180,000 in Scotland (1.0%) and £175,000 in Northern Ireland (10.2%).

Read more: Rents set to increase as ageing buy-to-let landlords retire

Within England, the West Midlands recorded the highest annual percentage increase in house prices in February, at 8.6%, while London recorded the lowest increase, at 2.9%.

London’s average house prices remain the most expensive of any region in the UK, with an average price of £532,000 in February 2023.

On a month-on-month basis, the ONS said average house prices fell in February this year for the third month in a row.

Meanwhile, private rental prices paid by tenants in the UK rose by 4.9% in the 12 months to March 2023, up from 4.8% in the 12 months to February 2023.

Annual private rental prices increased by 4.6% in England, 4.4% in Wales and 5.1% in Scotland in the 12 months to March 2023.

Within England, the highest annual increase was recorded in the East Midlands, at 5.1%, while the South East saw the lowest (4.2%).

Rental prices also jumped in London – by 4.8% per year, the highest annual rate since December 2012.

Jeremy Leaf, a north London estate agent, said: “Worries about inflation persist and buyers want to see value so are flexing their muscles before making decisions.”

Nicky Stevenson, managing director at estate agent group Fine & Country, said: “Inflation is proving more tenacious than expected, but it is still widely expected to fall sharply later this year.”

She added: “Sellers are much more open to negotiate, particularly if they have interest from chain-free first-time buyers.”

Read more: House prices drop amid falling demand as rents keep increasing

Jamie Alexander, director at Southampton-based Alexander Southwell Mortgage Services, said: “Average house prices continue to edge down on an annual and monthly basis.

“The property market is under real pressure and the stubborn inflation we have, remaining in double digits again on Wednesday, certainly won’t help.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The fall in inflation is welcome and means it is increasingly likely that (the Bank of England) base rate is near its peak.

“Despite the continued high cost of living, green shoots and resilience in the housing market are evident. Lenders expect tightening credit lines over the next three to six months but no credit crunch.

“Pricing on new mortgages continues to trend downwards, providing welcome relief for borrowers, although the rate of falls is slowing.”

Watch: Am I wasting my money by renting?

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