Despite the headlines from the indices suggesting prices are rising, they continue to remain pretty flat with fairly insignificant movements over the last few months, be it measured by asking prices, mortgage prices or actual prices from the Land Registry.
That said, feedback from everyone across the moving chain – agents, brokers, legal companies, all are suggesting that the market is a picking up a bit.
Most analysis suggests that the current election will have little effect on prices, so the next potential impact is whether the predictions for a rate cut in August will materialise and if this, plus perhaps some renewed optimism from a new government post the election, may help the market start a steady recovery in the Autumn.
However, it’s likely to take until 2025 for any significant change to the market.
Property price and market indices headlines
Record asking prices driven by pent-up demand
“The average price of property coming to the market for sale reaches a new record of £375,131, rising by 0.8% (+£2,807) in the month, as the momentum of the Spring selling season exerts some modest upwards price pressure.”
Home prices rise further while stock levels surge
“Asking prices have risen a fairly modest 0.4% since last month across England and Wales and are up just 0.4% since May 2023.”
Modest rebound in house price growth in May as market shows resilience
“UK house prices rose 0.4% month on month in May.”
UK house prices static in May
“Average house prices stable in May, down just -0.1% a monthly basis.”
Annual change still negative at -2.9%…
“…but price falls are getting ever smaller.”
What’s behind the record high supply of homes for sale?
“Annual UK house price inflation is running at -0.1%.”
Summary of the insights from this month’s indices
Rightmove
The market remains price-sensitive with average asking prices just 0.6% higher than a year ago.
The top-of-the-ladder sector is still leading price growth, with average prices up by 1.3% compared with last year.
Pent-up demand from would-be buyers who paused their plans last year is a key driver behind increased home-mover activity despite mortgage rates remaining elevated for longer than anticipated:
The number of sales being agreed during the first four months of the year is 17% higher than last year, outstripping the 12% increase in the number of new sellers coming to market.
Despite these positive lead indicators for higher transaction levels this year, the painful average of 154 days between agreeing a sale and legal completion remains a challenge for both agents and movers:
With 62 days on average needed to find a buyer before the legal process even begins, would-be sellers hoping to be in a new home for Christmas need to be taking action now.
Rightmove’s analysis shows that properties that need an asking price reduction take more than three times longer to find a buyer as those that do not, giving sellers who price right from the outset the edge to sell more quickly.
The market appears to be showing signs of resilience in the face of ongoing affordability pressures following the rise in longer term interest rates in recent months. Consumer confidence has improved noticeably over the last few months, supported by solid wage gains and lower inflation.
Market activity remained resilient throughout the spring months, supported by strong nominal wage growth and some evidence of an improvement in confidence about the economic outlook.
The number of new instructions during April 2024 was 7% more than during April 2023.
Market momentum remains relatively healthy, as indicated by the Typical Time on Market (median) for unsold property in England and Wales being one day less than last year. However, the current mean time on market at 165 days is eight days higher than in May 2023, indicating that harder to shift properties are hanging around longer on the market.
The price in April 2024 is -£18,920, or -5.0%, below the peak reached in October 2022, some eighteen months earlier. Nevertheless, April’s price still remains some £43,750- or 13.9%- higher than at the start of the pandemic in March 2020, over 4 years ago.
Transactions are at lowest levels since 1995.
Momentum in sales activity continues, with 13% more sales agreed.
At a city level, price inflation ranges from -3% in Ipswich to +3.6% in Belfast – southern cities continue to register modest price falls.
There are more homes for sale than at any point in the last 8 years – up 20% year-on-year in number terms and 25% higher in value terms.
More supply boosts choice and will keep price inflation in check in H2.
The north-south divide in house price inflation is set to remain.
