As of August 2022, the average house price in the UK is £295,903, and the index stands at 155.2. Property prices have risen by 0.9% compared to the previous month, and risen by 13.6% compared to the previous year.
Source - https://landregistry.data.gov.uk/app/ukhpi
House prices in the UK have risen considerably in the last couple of years, with the pandemic and stamp duty holiday bringing about a more volatile market. The Land Registry's UK House Price Index is the most reliable barometer of what's happening to house prices, as it's based on actual property sales rather than asking prices. It works on a two-month lag, so the most recent figures are for August.
The Land Registry says that the average price of a property in the UK rose by 13.6% year-on-year in August to reach £295,903, as shown in the graph below.
As we mentioned earlier, these year-on-year figures are distorted by the market in 2021 around the time of the stamp duty holiday. The data reflects property purchases added to the Land Registry in August, so it's likely the sales of these homes were actually agreed back in May or June - a very different time for the market.
Has the property market really been slowing down?
For the first half of 2022, there was distortion between supply and demand levels, with too few properties coming on to the market. A severe lack of stock, and this hasn't gone away completely. The estate agent trade body Propertymark reported its members had an average of 30 properties for sale per branch in September, compared with a pre-pandemic average of 51.
There are signs, however, that demand from buyers has started to drop. Rightmove says properties took an average of 37 days to sell in September, up from 32 days back in May.
With mortgage interest rates increasing and the demand for property seemingly on the downturn, something has to give. A drop in prices wouldn't necessarily be a bad thing. Lower prices would help to counteract the higher mortgage repayments and help to reignite demand.