ONS: London property market stalls despite UK house price spring bounce

Average house prices in the capital fell below £500,000 in March 2024. But growth became stronger in Scotland and Yorkshire.

Colourful London properties as ONS finds average house price in capital has stalled
Average UK sold house prices have fallen below £500k in London, the ONS has found (image: Getty Images)
(Image credit: Getty Images)

House price inflation recorded a surprise early-spring bounce in March, new figures from the Office for National Statistics (ONS) have suggested.

According to ONS analysis of Land Registry data, which shows prices as they were at the completion stage, the average home sold for £283,000 - a 1.8% (£5,000) increase compared with March 2023. It followed a dip in annual property price growth in February.

Scotland led the way, posting year-on-year growth of 6.7%, making a typical property worth £192,000. Northern Ireland also experienced a significant jump of 4% to £178,000. The more expensive parts of the UK - England and Wales - fared less well, with respective growth of 1% to £299,000 and 1.3% to £214,000.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

It comes amid predictions that the housing market will continue to see a north-south price divide over the coming years.You can see how house prices are faring in your area with the ONS’s house prices tool.

The figures contrast with house price indices from major lenders. Halifax and Nationwide both recorded a drop in house prices against the year due to rising mortgage rates. More recent analyses from Rightmove and the Royal Institution of Chartered Surveyors (RICS) have suggested a form of spring bounce is underway. 

While they are more comprehensive, Land Registry figures can include property transactions that were agreed several months before the month the data has been published in due to the time it takes between a sale completing and being registered.

Average London house price falls below £500k

Almost all parts of the UK registered a rise in property prices month-on-month (without seasonal effects being taken into account).

Scotland recorded the biggest percentage increase, with homes going up in value by 2.3% compared to February 2024. Yorkshire and the Humber was not far behind with growth of 2.2% (5% annually), meaning the average price in the region has grown to almost £210,000.

The rate of price hikes was significantly lower elsewhere in the country, with most areas recording monthly increases of less than 1%. The two most expensive areas outside of London - the South East and East of England - were among the areas in this position, with monthly growth of 0.3% and 0.5% respectively. Their annual inflation rates were -1.3% and 0.8%.

Some parts of the country even posted reversals. For example, London homes saw their average prices fall 0.9% month-on-month and 3.4% year-on-year.

Matt Thompson, head of sales at the estate agency Chestertons, put this slowdown to the political cycle. 

“In March, the property market witnessed steady demand from buyers although some house hunters decided to pause their search in the hope for major incentives to be announced in the Spring Budget," he says.

Despite there being no major announcements for homeowners in the Spring Budget, Thompson added that he expects the data to pick up again when April’s figures are released. 

 “The majority of these buyers have since resumed their property search," adds Thompson.

"March concluded the first quarter of the year with a busy property market – particularly in the capital where demand continues to outstrip supply.”

Top end of market outselling smaller homes

The ONS data also showed larger properties were growing in value at a greater pace than smaller ones. The average top rung detached home registered an annual increase of 2.5% (£11,000), with their typical value now sitting at £440,000.

Semi-detached properties were 2.2% (£6,000) up on the year at £276,000, while terraced homes came in 1.3% (£3,000) higher at £230,000. Flats and maisonettes registered growth of 1% (£2,000), with the typical apartment now worth just under £230,000.

In a sign that improving inflation figures and wage growth could be easing the financial pressure on those saving up for their first home, the data suggested first-time buyers were trading up. The typical home bought by new market entrants was worth £236,000 - 1.8% higher year-on-year and 0.8% month-on-month. It comes as separate ONS data showed rents were 8.9% up in April compared to a year prior. This was down from 9.2% the previous month.

Commenting on these figures, Malcolm Webb, technical director at Legal & General Surveying Services, said: "Although historically high mortgage rates and house prices are still here, first-time buyers haven’t given up on their home-owning dreams by any stretch. Comparing Q1 2024 and Q4 2023, we’ve seen a 37% increase in 18-30 year old first-time buyers searching for a property.

"There’s plenty of activity to suggest that we’re moving in the right direction. With inflation approaching the government’s 2% target, there’s every reason to believe we’re in for a strong remainder of the year."

Second steppers - current owners moving up the property ladder - saw the same monthly change as first-timers, but annual growth was slower at 1.6%. The average cost faced by an owner occupier was just shy of £329,000.

Henry Sandercock
Staff Writer

Henry Sandercock has spent more than eight years as a journalist covering a wide variety of beats. Having studied for an MA in journalism at the University of Kent, he started his career in the garden of England as a reporter for local TV channel KMTV. 

Henry then worked at the BBC for three years as a radio producer - mostly on BBC Radio 2 with Jeremy Vine, but also on major BBC Radio 4 programmes like The World at One, PM and Broadcasting House. Switching to print media, he covered fresh foods for respected magazine The Grocer for two years. 

After moving to NationalWorld.com - a national news site run by the publisher of The Scotsman and Yorkshire Post - Henry began reporting on the cost of living crisis, becoming the title’s money editor in early 2023. He covered everything from the energy crisis to scams, and inflation. You will now find him writing for MoneyWeek. Away from work, Henry lives in Edinburgh with his partner and their whippet Whisper.