“The increase in house prices will be welcome news in the professional buy-to-let market. Landlords are showing optimism for the remainder of the year, bolstered by the recent base rate cut”
– Emma Cox – Shawbrook
The latest data on house prices released by the government has revealed that average annual UK house price growth was provisionally estimated to stand at 2.7% in the 12 months to June 2024 – level with the revised estimate of 2.7% in the 12 months to May 2024.
According to this morning’s figures, the price of a typical home in the UK during June was £288,000 following a rise of 0.5% from May.
Average house prices in the 12 months to June 2024 increased in England to £305,000 (2.4%), increased in Wales to £216,000 (1.8%) and increased in Scotland to £192,000 (4.3%). The average house price increased in the year to Q2 (Apr to Jun) 2024 to £185,000 in Northern Ireland (6.4%).
Tom Bill, head of UK residential research at Knight Frank commented: “It has been a sluggish two years for the UK housing market as interest rates returned to normality but August may prove to be a turning point. The first rate cut in more than four years and lower-than-expected inflation numbers should boost demand this autumn and we expect average prices to rise by 3% in 2024.”
Nathan Emerson CEO at Propertymark, comments: “It is positive to witness further growth within the housing market despite some of the uncertainties consumers have faced this year.
“Across the coming months, we should start to see a greater level of affordability and confidence return, as the rate of inflation remains within the initially targeted range and with interest rates now taking their first steps to a controlled pathway downwards. It is essential we start to see the pledge of nearly two million homes promised by the UK government across the next five years turn into a firm reality.
“There is currently an enormous pressure on supply; however, there must be an extreme consideration to ensuring new homes are built in the right areas, with the right infrastructure at the right moment in time. New housing developments ideally need to enhance urban areas already available, making full use of land such as derelict industrial sites before turning to greenbelt locations.”
Jason Tebb, President of OnTheMarket, said: “Property prices continue to edge upwards as buyers and sellers carried on with their moves despite the impending general election.
“Now that is all out of the way, activity in the housing market has been brisk, assisted by the first reduction in interest rates since 2020. While inflation has edged up to 2.2 per cent, this was expected and not as high as forecast, so shouldn’t cause too much consternation for the Bank of England.
“Borrowers will be hoping for further rate cuts in the autumn which will help ease affordability. In the meantime, lenders continue to gently reduce their fixed-rate mortgages, which should give buyers more confidence to make their move.”
Emma Cox, managing director of Real Estate at Shawbrook, comments: “The increase in house prices will be welcome news in the professional buy-to-let market. Landlords are showing optimism for the remainder of the year, bolstered by the recent base rate cut.
“This move has reassured property investors, instilling confidence in the long-term economic outlook and encouraging further market activity. Additionally, the government’s renewed focus on revitalising the construction sector—through ambitious housebuilding targets and more efficient planning processes—should help boost the supply of high-quality rental stock, which is a positive development for the market.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “Here’s another example of the housing market’s resilience – very little change in prices at a time of considerable election and interest rate uncertainty.
“Activity has improved since, helped by the long-awaited cut in base rate although already taken into account by many. The slight uplift in the latest inflation figures is unlikely to knock the interest rate reduction strategy off course but will have some impact on confidence as it is likely that the pace may slow a little, leaving the market to find a new level.”
Arjan Verbeek, CEO of Perenna, comments: “Rising house prices for a sixth consecutive month means the goalposts for most first-time buyers have moved further away yet again. Whilst mortgage rates are coming down, structural issues linger. Whether it’s the stressed mortgage rate that traditional mortgage products assess borrowers with or the loan-to-income flow limit restriction, mortgage borrowers across the demographics are hamstrung.
“To help more people onto the ladder and keep them there, the mortgage market needs to innovate and expand its offering. Mortgage borrowers must have the greatest choice possible about the type of product they can access. As flexible longer-term fixed-rate mortgages become more prevalent, we hope this will take us one step forward to solving the homeownership crisis.”
