INTRODUCTION
The UK property market continues to face both opportunities and challenges as inflationary pressures persist. House prices show a mixed picture across regions, while rental prices remain elevated due to supply shortages. Although mortgage rates are still relatively high, there has been a slight easing, providing some relief for buyers. This report covers the latest house price indices, transaction volumes, and rental market developments.
HOUSE PRICES
UK House Price Index: The most recent data offers insights into the overall market. The UK House Price Index for June 2024 indicates a slight increase, reflecting a steady market.
UK Average Price: £288,000 (June 2024)
Annual Price Change: +2.7% (June 2024)
Monthly Price Change: +0.5% (June 2024)
London:
London Average Price: £523,134 (June 2024)
London Annual Price Change: +1.2% (July 2024)
London Monthly Price Change: +0.6% (July 2024)
HALIFAX HPI: The Halifax HPI, which looks at mortgage approvals, shows slight growth in house prices, with a higher average for August 2024:
UK Average Price: £292,505 (August 2024)
Annual Price Change: +4.3% (August 2024)
Monthly Price Change: +0.3% (August 2024)
TRANSACTIONS
Transaction volumes continue to lag behind historical levels. The provisional estimate for UK residential transactions in July 2024 was around 91,000, marking an 8% increase compared to July 2023.
RENTAL INDEX
The rental market remains under pressure with high demand and limited supply, pushing prices higher, especially in major cities like London.
Average UK Rent: £1,325 (August 2024)
Annual Variation: +5.1% (year-on-year)
Average London Rent: £2,148 (August 2024)
Annual Variation in London: 0.1% (year-on-year)
Households continue to spend a significant proportion of their income on rent, with the average UK rent-to-income ratio standing at 37% for a single earner.
NEWS
Bank of England: The Bank of England has held interest rates steady in September 2024, but market anticipation suggests that a rate cut might come later in the year to alleviate pressures on borrowing costs.
Construction Slowdown: The rate of new home registrations has continued to decline, with a 12% drop in the first half of 2024 compared to the same period in 2023. This points to continued challenges in new housing supply.
Mortgage Rates: The average mortgage rate for a two-year fixed mortgage has slightly decreased to 5.10% as of September 2024, down from 5.15% in August.
Rightmove: The UK property market experienced a seasonal dip in asking prices this August, with a decline of 1.5% compared to July, bringing the national average asking price to £367,785. This drop, typical for the late summer period, amounted to a decrease of £5,708
Rural Property Prices: According to Nationwide, rural properties continue to see stronger annual price growth than urban areas, with prices up by 3.7% year-on-year as of August 2024.
First-Time Buyers: Zoopla has reported an increase in first-time buyers entering the market, thanks to more competitive mortgage products and the expectation of future interest rate cuts.ember update captures the key trends shaping the UK property market, providing valuable insights for stakeholders navigating this dynamic environment.
The average 5-year fixed mortgage rate is now 4.80%, an improvement from 5.82% a year ago
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