September Property Market Review 2023
October 25, 2023

Our monthly property market review is intended to provide background to recent developments in property markets as well as to give an indication of how some key issues could impact in the future.

We are not responsible or authorised to provide advice on investment decisions concerning property, only for the provision of mortgage advice. We hope you will find this review to be of interest.

Economic uncertainty weighs on the residential market

The most recent UK Housing Market Update from Savills has highlighted that buyers’ budgets continue to be impacted by higher mortgage rates, and although inflation has begun to move lower, core inflation remains ‘unexpectedly sticky.’

During July, with completed sales reducing by 18% on the 2017-19 average, market activity was notably subdued, according to HM Revenue & Customs (HMRC) data. Accordingly, during the three-month period to July, mortgage approvals were 23% below 2017-19 levels and sales agreed were 12% below the average (2017-19 levels).

In its report, Savills referred to the most recent Royal Institution of Chartered Surveyors (RICS) survey, in which most surveyors reported decreasing demand and supply, which is likely to continue suppressing activity and house prices over the coming months.

Looking at UK annual rental growth, Hamptons Lettings index has shown that the cost of renting a new property was 12% higher in August compared to the previous year. The biggest increase was in Greater London, rising by 17.1% year-on-year to bring the average to £2,332 per month. After that comes Scotland, with an increase of 13.4%.

Improved EPC ratings see green price premium

Research by Rightmove has found that 78% of homeowners would be motivated to make changes if their energy bills reduced. The higher a home’s energy performance certificate (EPC) rating is, the lower the property’s energy bills are likely to be.

The analysis of 300,000 properties that have sold twice in the last 15 years, and have had a new EPC certificate issued, shows there is an additional green premium on top of local house price growth over time.

A home with an EPC rating improving from D to C could see an average increase in value of 3%, or £11,157. While moving from an F to a C rating could increase the property’s value by an average of 15%, or almost £56,000, when looking at the current national average asking price.

A home with an EPC rating improving from D to C could see an average increase in value of 3%, or £11,157.

The highest yielding areas for buy-to-let property

The average gross rental yield in the UK is currently 5.03%, based on an average buy-to-let property costing £263,000 and an average rental of £1,163 per month, according to Zoopla’s September Rental Market Report.

The region with the highest rental yields is the North East, where the average gross yield is 7.2%. The North East’s yield appeal is largely thanks to the investment triangle of Hartlepool, Sunderland, and Middlesborough where gross yields sit between 8.01% and 8.39%. Following the North East is Scotland (7.1%) and the North West (6.3%).

The highest yielding cities in the UK are Sunderland, Dundee and Burnley, which offer a gross yield of between 7.7% and 8.4%. London has the lowest gross yield (4.7%) in the UK owing to the cost of buying a property there. This is despite average rents in London reaching £2,053 this month.

House prices: Headline statistics

House Price Index (July 2023)152.0
Average House Price£289,824
Monthly Change0.5%
Annual Change0.6%

*(Jan 2015 = 100)

Average house prices in the UK increased by 0.6% in the year to July 2023

On a non-seasonally adjusted basis, average UK house prices increased by 0.5% between June 2023 and July 2023

The average price in London was £534,265.

Source: The Land Registry
Release date: 20/09/23
Next data release: 18/10/23

Average monthly price by property type – July 2023

Property TypeAnnual
Detached £458,7072.2%
Semi-detached £281,5201.0%
Terraced £236,520-0.3%
Flat / maisonette £229,931-1.0%

Source: The Land Registry
Release date: 20/09/23

House prices: Price change by region

RegionMonthly change (%)Annual change (%)Average price (£)
Northern Ireland (Quarter 2 - 2023)1.4%2.7%£173,898
East Midlands-0.5%1.9%£249,484
East of England0.4%0.2%£352,723
North East0.5%2.7%£163,480
North West0.3%1.0%£215,648
South East0.5%0.4%£394,096
South West-0.2%-1.0%£323,713
West Midlands Region0.2%0.4%£251,313
Yorkshire and The Humber1.5%2.5%£212,730

Source: The Land Registry
Release date: 20/09/23
Next data release: 18/10/23

Housing market outlook

“We do expect further downward pressure on property prices through to the end of this year and into next, in line with previous forecasts. While any drop won’t be welcomed by current homeowners, it’s important to remember that prices remain some £40,000 (+17%) above pre-pandemic levels. It may also come as some relief to those looking to get onto the property ladder”.

Kim Kinnaird, Director, Halifax Mortgages
Source: Halifax September 2023

Important Information
All details are correct at the time of writing (20 September 2023).

Contains HM Land Registry data © Crown copyright and database right 2023. This data is licensed under the Open Government Licence v3.0.

It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.


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