INTRODUCTION
The London property market continues to show resilience despite economic headwinds, with house prices and rental values demonstrating modest growth. Mortgage rates remain elevated, albeit with slight declines following recent Bank of England decisions. This month’s market report delves into the latest house price indices, transaction volumes, and rental market trends.
HOUSE PRICES
UK House Price Index
The UK HPI reflects completed housing transactions, typically lagging by 6 to 8 weeks from sale agreement to completion. The latest data from June 2024 provides insights into market conditions during the spring.
UK Average Price: £287,924 (June 2024)
Annual Price Change: +2.7% (June 2024)
Monthly Price Change: +0.5% (June 2024)
London
London Average Price: £530,412 (June 2024)
London Annual Price Change: +3.1% (June 2024)
London Monthly Price Change: +0.4% (June 2024)
HOUSE PRICES - HALIFAX HPI
The Halifax House Price Index uses a different methodology, focusing on mortgage approvals, allowing for earlier insights than the UK HPI.
UK Average Price: £291,268 (July 2024)
Annual Price Change: +2.3% (July 2024)
Monthly Price Change: +0.8% (July 2024)
TRANSACTIONS - UK House Price Index
The provisional seasonally adjusted estimate for UK residential transactions in June 2024 was 98,000, which represents a slight recovery from previous months but is still 20% lower than the same period last year, reflecting continued caution among buyers.
RENTAL INDEX MARKET (July 2024)
Data from HomeLet shows the continuing upward pressure on rental prices, driven by high demand and limited supply.
Average rent in UK: £1,144 (July 2024)
Annual Variation for the UK: +4.9% (year on year)
Average rent in London: £1,905 (July 2024)
Annual Variation for London: +5.6% (year on year)
Household Rent to Income Ratio UK: 36% (single earner)
“The rental market remains under significant pressure, with a persistent imbalance between supply and demand continuing to push rents higher across the UK.” - HomeLet
NEWS
The Bank of England is expected to cut the base rate in September 2024, offering some relief to borrowers but maintaining caution for the housing market's trajectory.
New home registrations have dipped by 10% in the first half of 2024 compared to the same period in 2023, indicating a slowdown in construction activity.
Average mortgage rates have shown slight declines following the Bank of England’s recent announcements, with the average rate for a two-year fixed mortgage now at 5.15%, down from 5.35% in June 2024.
Rightmove reports a 5th consecutive month of increasing asking prices, pushing the UK average to a new high of £369,524 in August 2024, driven by a shortage of available properties.
Nationwide Building Society suggests that the annual growth in rural property prices continues to outpace urban areas, with rural prices up by 3.9% year-on-year in July 2024.
Zoopla highlights a significant increase in the number of first-time buyers entering the market, attributed to lenders offering more competitive rates in response to the Bank of England’s anticipated rate cut.
This update reflects the most current trends and provides a comprehensive overview of the UK property market as of August 2024.
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