Comment from Richard at Atom bank re the latest ONS House Price Index

17 January 2024

“On the face of it, an annual drop of 2.1% paints a gloomy picture for the market, however there may be a slight lag compared to other house price indicators which are leaning towards a more positive outlook. Earlier this week, Rightmove indicated that the property market is gathering momentum, with average asking prices at the start of the year increasing at the highest rate since 2020, while the number of sales agreed was 20% higher during the first week of January than the same period last year.

“The start of the year has seen a so-called price war, with many lenders making significant rate cuts to win business. Cheaper mortgages will no doubt encourage buyers to see what’s out there, which should help to underpin property prices. If this demand helps to attract new vendors, the return to greater liquidity will be more good news for the economy and should build a growing sense of confidence as we move towards an election later this year.”