The recent trend for the UK has been for house prices to rise steeply in the first half of 2022, before falling back as a combination of factors including base rate increases and the cost-of-living squeeze have taken effect.
According to the newest Land Registry data, this trend is continuing; the overall UK picture for December saw average house prices dropping by 0.4 per cent to £294,329. However, there are some parts of the country where the situation varies from this average in significant ways.
Most notably for anyone dealing with estate agents in Sutton, the data showed that the average house price in London was actually unchanged in December compared with November, holding steady at £542,911. This pattern was matched in Sutton, where the typical price remained at £450,454.
A reason this is the case may lie in the longer-term trends. London trailed behind other parts of the UK for house prices during the pandemic as the ‘race for space’ saw many looking to prioritise living in the countryside and places with big gardens, where social distancing was easier and being close to the office in a time of remote working did not matter.
However, even with all the restrictions lifted, house price inflation in London trailed other regions, just as it has done since the Brexit vote. In 2022 it had the lowest house price inflation rate of any English region at 6.7 per cent, compared with 10.3 per cent for England overall and a UK rate of 9.8 per cent.
This may suggest that in other parts of the country, prices were over-inflated in the first half of 2022 and are this declining by more as the market correction takes place, whereas in London this effect was less apparent, ensuring the impact of the economic downturn and higher mortgage costs on price is much less.