PwC comments on the latest ONS house price data

Commenting on the latest ONS house price data, Barret Kupelian, Chief Economist at PwC UK, says:

House prices increased by 1.8% in the 12 months to March 2024, entering positive territory. If we couple this with some of the underlying drivers underpinning house prices—real wage growth and financial conditions—both suggest that the housing market correction that saw prices contract since the beginning of the cost of living crisis has come to an end, and that we are entering a new housing market cycle. 

Private rental inflation also appears to have stabilised at a historically high 8.9%, which continues to add to the cost-of-living pressures facing households. London is particularly vulnerable to this trend as private rental inflation stands at more than 10%, which is substantially faster than earnings growth or the consumer price index. On the flipside, house prices in the capital continue to decrease making it cheaper for those with high earnings and substantial deposits to buy their first house.