House price growth slows for fifth month in a row

Annual house price growth slowed for the fifth consecutive month in May, Land Registry data shows.

The official figures show house prices rose 1.9% annually in May 2023 to £285,861, down from 1.9% in the 12 months to April 2023.

Price growth was flat on a monthly basis.

Annual house price inflation was highest in the North East where prices increased by 4.0% in the 12 months to May 2023, the Land Registry said.

The East of England was the English region with the lowest annual growth, where prices were little changed in the 12 months to May 2023.

It comes as the inflation rate slowed from 8.7% to 7.9% for June, the lowest rate for more than a year, giving hope that the economic situation may improve and interest rate hikes can be limited.

Commenting on the data, Chris Druce, senior research analyst at Knight Frank said, “With average borrowing costs now above the level seen after a spike after last September’s poorly received mini-Budget sentiment has weakened and UK house price growth continues to moderate.

“The inflation data suggests that we’re on course to reach peak rates sooner rather than later. However, we’re not there yet.

“Until we are, the associated uncertainty will make it hard for buyers to plan and lead to further hesitation in the market, keeping downwards pressure on prices. We expect house prices to fall by 10% over this year and next, although strong wage growth, low unemployment and the forbearance of lenders will make steeper falls than this unlikely.”