Annual house price inflation slows to 1.7%

House prices increased by 1.7% in the year to June -the slowest rate of annual inflation since July 2020 in the pandemic.

The UK House Price Index, which is published by the Office for National Statistics using Land Registry data, shows the average UK house price increased by 1.7% in the year to June to £287,546. This followed a 1.8% rise in May. The small annual growth was due in part to a surge in prices last summer.

 Average annual house price % change

House prices however increased for the third successive month year-on-year following a fall towards the end of 2022 and in early 2023.

The UK House Price Index, which is published by the Office for National Statistics (ONS) using Land Registry data, shows the average house prices increased in April, May and June compared to the previous month, reversing a drop in prices since November.

The figures come as the ONS announced inflation, as measured by the Consumer Price Index has fallen to 6.8% in the year to July, down from 7.9% in June.

This means inflation is much lower than it was at its peak of 11.1% in October, but still remains historical high.

Frances McDonald, director of research at Savills, said: “July’s inflation data will come as welcome news to prospective home buyers, who will hope to see further rate cutting by the major lenders in coming weeks.”

“With all signs indicating that the Bank of England base rate looks to be at, or very close to its peak, some of the affordability pressures should ease, bringing greater certainty back to the housing market. But, despite conditions steadily improving, markets are expected to remain price sensitive in the short term, with established prime markets most synonymous with equity-rich buyers likely to continue to outperform over the coming months.” 

UK House Price Index