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7 August 2025: Rate Cut Expected To Boost Housing Market
House prices rose by 0.4% in July, the biggest monthly increase since January, taking annual price growth to 2.4%, writes Jo Thornhill.
However, the figures from the UK’s biggest mortgage lender, Halifax, show a decrease in annual house price inflation from 2.7% in June.
The average home across the UK is now worth £298,237, down from the record high of £298,815 in January.
Regionally, Northern Ireland continues to be the strongest performing part of the UK, with house price inflation of 9.3% over the past year. Its average property now costs £214,832.
The Bank of England will post its latest decision on interest rates at noon on 7 August. The benchmark Bank Rate is currently 4.25%.
Scotland has also posted strong annual house price growth, increasing by 4.7%, with average prices now at £215,238. Prices in Wales have risen 2.7% year on year, to an average of £227,928.
Among English regions, the North West and Yorkshire and the Humber have the highest rate of property price inflation, up 4.0% over the last year to £242,293 and £215,532 respectively.
The South West, the South East and London continue to see moderate growth, with prices rising by just 0.2%, 0.5%, and 0.5% respectively. The average home in the South West is now worth £302,306 while for the South East the average has hit £388,260.
London remains the most expensive part of the UK, with property prices averaging £539,914.
Jason Tebb at property website OnTheMarket said: “The market continues to demonstrate remarkable resilience, shaking off external economic concerns amid evidence of plenty of activity.
“While the average house price is close to a record high, this is only part of the picture as behind the headline figure are considerable regional variations and differences according to property type.
“Recent Bank Rate cuts have been fundamental in boosting confidence and activity. Further rate reductions will provide much-needed stimulus and boost buyer and seller confidence as we head towards autumn. Further relaxing of criteria by lenders will also help.”
Mark Harris at mortgage broker SPF Private Clients said: “Another cut in interest rates this month should further boost confidence and activity. While inflation remains higher than the Bank of England’s target, wage inflation is slowing and unemployment is rising. However, despite wider economic uncertainties, the picture for potential home buyers remains broadly stable.
“Mortgage rates continue to edge downwards but it’s not just pricing that is improving, with lenders also broadening lending policy, including increasing loan-to-income caps and lowering some income requirements, which is boosting affordability.”
1 August 2025: Market ‘Holding Up’ After Stamp Duty Changes
Average house prices rose 0.6% in July after falling by 0.9% the previous month, according to data from Nationwide building society. The increase takes annual property price inflation to 2.4%, up from 2.1% in June, writes Jo Thornhill.
The value of the average home across the country is £272,664.
Nationwide’s data shows that, despite the change to stamp duty nil rate band thresholds on 1 April 2025, activity has been resilient. Estate agents and mortgage lenders are hopeful of an interest rate cut by the Bank of England on Thursday 7 August.
Robert Gardner, chief economist at Nationwide, said: “Looking through the volatility generated by the end of the stamp duty holiday, activity appears to be holding up well. Indeed, 64,200 mortgages for house purchase were approved in June, broadly in line with the pre-pandemic average, despite the changed interest rate environment.”
Gardner also points out that affordability has been slowly improving as mortgage rates have fallen over the past year, with the house price to earnings ratio, which stands at around 5.75, at its lowest level in more than 10 years.
He said: “After deteriorating markedly in the wake of the pandemic, housing affordability has been steadily improving, thanks to a period of strong income growth alongside more subdued house price growth and a modest fallback in mortgage rates.
“While the price of a typical UK home is around 5.75 times average income, this ratio is well below the all-time high of 6.9 recorded in 2022 and is currently the lowest this ratio has been for over a decade. This is helping to ease deposit constraints for potential buyers, as has an improvement in the availability of higher loan-to-value mortgages.”
Alice Haine, analyst at Bestinvest, said: “Homebuying activity may be picking up, but there are wide variations in price growth across the country. Competition among sellers has also been heating up amid a surge in listings, which may keep a lid on prices.
“If the Bank of England proceeds with a rate cut next week, mortgage rates may ease further, opening up the market for more buyers. The traditional summer surge in listings is another positive for buyers, who can take advantage of a wider range of homes to choose from. It is less of a boon for sellers, however, as it raises the potential for heavier negotiations on price.”
Mark Harris of mortgage broker SPF Private Clients, said: “Lower mortgage rates, with the expectation of more reductions to come, are giving the market impetus and putting borrowers in a stronger position when it comes to negotiating their property purchase. This, in turn, is keeping prices in check.
“With the markets expecting a further rate reduction next week, we could be in for a busy autumn. Lenders continue to trim their mortgage rates, while easing of mortgage lending rules should also enable borrowers to take on bigger mortgages in the coming months.”
Zoopla figures based on Land Registry data for property sales show prices are up 1.3% annually in the year to June. The online property portal also found buyer demand is up 11%, and the number of sales agreed is up 8%, compared to this time last year.
However, there has been a sharp rise in the number of first-time buyers paying stamp duty since the changes in April. Zoopla data shows 41% of FTBs paid stamp duty in June, compared to 19% in March 2025, before the changes.
21 July 2025: Homes For Sale At Decade-High Levels
The average price of property coming onto the market fell by 1.2% in July, according to the latest data from property website Rightmove, writes Jo Thornhill.
The drop represents a fall in real terms of £4,531 this month, taking the average asking price across the country to £373,709. It follows an average fall of 0.3% in asking prices in June.
Average asking prices are up a marginal 0.1% annually.
Rightmove has subsequently adjusted down its 2025 forecast for house prices, from a 4% increase over the year, to a rise of just 2%.
London has seen the sharpest fall in asking prices this month, with typical new seller prices down by 1.5%, and the drop increases to 2.1% for inner London. Asking prices in the capital are higher than any other city or region in the country at £684,689.
Prices in the North East of England have shown the most resilience, rising by 1.2% in July to £196,844.
The increase in the number of homes on the market is a major factor acting to suppress price rises. The average stock per estate agent was 65 in July, which is a decade-high level.
Overall market activity is positive, with Rightmove reporting the number of sales being agreed at 5% higher than a year ago. The number of potential buyers contacting estate agents is 6% higher than last year.
Colleen Babcock at Rightmove says it has been a promising first half of the year for buyers and sellers, particularly given changes to stamp duty in April: “Even after the stamp duty deadline, we’re seeing more sales being agreed and more new potential buyers entering the market than at the same time last year. Still, the knock-on effect of high buyer choice is slower price growth.
“Looking ahead to the second half of 2025, there will still very likely be the usual quieter seasonal periods around the summer holidays and Christmas, but we expect market activity to continue to be resilient.
“Crucially, buyer affordability is heading in the right direction, and another two Bank of England Bank Rate cuts before 2026 would be a big boost to this.”
The next Bank of England interest rate announcement is on 7 August.
Rightmove measures asking prices in England, Scotland and Wales. Asking prices fell in every area except the North East of England and East Midlands.
Prices in Scotland fell by 0.4% in July (they are up 2.2% annually) to £199,590. In Wales, average asking prices were down by 0.5% (up 2% annually) to £270,901.
Ryan Etchells at mortgage finance company Together said: “A consecutive monthly fall in house prices confirms what we’ve been seeing: it’s a buyer’s market. What may have been interpreted as a blip following the increase in stamp duty in April could be a more prolonged period of subdued activity.
“While mortgage rates have reduced slightly in recent months, stubborn inflation and high stamp duty may well be holding back buyers, who are waiting to see what will happen to mortgage rates. All eyes will be on the next Bank of England interest rate decision, with many experts predicting a cut.
“However, subdued house prices may present an excellent opportunity for aspiring homebuyers, as well as landlords looking to grow their portfolios.”
And Jeremy Leaf, a London-based estate agent, said: “Sales are still being agreed but nearly always with sellers who have recognised the importance of setting a realistic initial figure to differentiate themselves from so much other, often similar, property.
“Otherwise, buyers will take even more time waiting for the ‘right’ property and perhaps worrying about the possibility of autumn tax rises despite improving affordability – including the likelihood of imminent mortgage rate cuts.”
16 July 2025: Mortgage Rate Cuts ‘Boost Confidence’
House prices rose by 3.9% in the year to May, according to data from the Office for National Statistics (ONS), writes Jo Thornhill.
The rise, which included a 1.1% monthly increase in May, takes the average UK house price to £269,000 – £10,000 higher than 12 months ago.
The official figures, based on completed sales across the UK, show prices are up 3.4% in England (where the average house price now stands at £290,395), 5.1% in Wales (£209,580), and 6.4% in Scotland (£191,927). The average house price in Northern Ireland increased in the year to quarter one of 2025 (January to March) to £185,000, a rise of 9.5%.
Property market experts say the data is encouraging given the changes to Stamp Duty in England and Northern Ireland in April, which mean more buyers are paying higher levels of the tax when purchasing property.
Lower mortgage rates, however, are counteracting higher tax costs by boosting both buyer and seller confidence. Additionally, more lenders have been able to relax their income-to-loan ratios thanks to new guidelines from the financial regulator, which should help more first-time buyers onto the housing ladder.
Mortgage brokers are also hopeful there could be another interest rate cut by the Bank of England in August (the next rate decision is on 7 August), which would further fuel property market activity.
The only dampener on falling rates could be the rate of inflation, currently at 3.6%, which remains stubbornly higher than the Bank of England’s target of 2%.
Jason Tebb, president at property portal OnTheMarket, said: “The market continues to demonstrate remarkable resilience, assisted by four interest rate reductions since last August. These cuts, with the suggestion of more to come, have boosted buyer and seller confidence, increasing activity and benefiting the wider economy.
“The unexpected increase in inflation to 3.6 per cent in June may persuade the Bank of England to pause with regard to further reductions, although much depends on other economic data such as the jobs market.
“With mortgage lending rules being relaxed to assist buyers with affordability and boost first-time buyer numbers, there is recognition that it is a struggle to get on the housing ladder, but only time will tell if these measures are enough to make a real difference.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Rate reductions have been playing their part in encouraging buyers and sellers to take the plunge, and the markets still expect a further cut in Bank Rate next month, even though inflation ticked up in June.
“Lenders have plenty of liquidity and are keen to lend, with mortgage rates fairly steady on the whole, while some lenders continue to reduce fixed rates.”
Amy Reynolds at Richmond estate agent Antony Roberts said: “The market continues to surprise. While headlines paint a gloomy picture, the reality on the ground is far more nuanced. June was a record month for us in terms of newly-agreed deals, and July has started strongly for exchanges.
“That said, fall-throughs were also high in June – it’s very much a tale of two halves.”
7 July 2025: Relaxation Of Lending Rules Boosting Activity
- House price growth flat in June (0% change)
- Annual growth stable at 2.5%
- First-time buyers back to pre-stamp duty change levels
House prices were flat in June showing a 0% change, compared to a drop of 0.3% in May, according to the latest data from the UK’s largest mortgage lender, Halifax.
Annual growth in prices is relatively stable, recorded at 2.5% in June, down from 2.6% in May, although prices dropped marginally by 0.3% during the second quarter of the year between April and June.
Halifax puts the price of the average UK property in in June at £296,665.
First-time buyer numbers are also back to levels seen before the increase in nil-rate stamp duty thresholds on 1 April in England and Northern Ireland, said the lender.
The changes, which had led to a drop-off in the number of house hunters in April, pushed more buyers into paying the property tax when purchasing a home.
But new regulatory guidance in ‘stress test’ rates – which checks what a borrower could afford at higher rates of interest than offered by their mortgage deal – has enabled lenders to take a more flexible approach to affordability, which is boosting the number of buyers.
Amanda Bryden, head of mortgages at Halifax, said: “Over the last two months, we’ve already helped an additional 3,000 buyers – including more than 1,000 first-time buyers – access a mortgage they wouldn’t have qualified for before.”
As also reported by Nationwide (see story below), Northern Ireland continues to record the fastest pace of annual price growth. Average property prices in the country have risen by 9.6% in the past year, taking the value of a typical home to £212,189.
Prices in Scotland are also showing strength, up by 4.9% annually to an average of £214,891. While prices in Wales are up by 3.9% year on year to £229,622.
Within England, the North West region has posted the highest rate of property price inflation, up 4.4% over the last year to £241,938.
The South West and London continue to see more subdued growth, with prices rising by just 0.5% and 0.6% respectively. However, the capital remains by far the most expensive part of the UK, with the average home now priced at £540,048.
The average property value in the South West is now at £303,271.
Mark Harris, chief executive at mortgage broker SPF Private Clients, said that lower mortgage rates and the easing of lending criteria has helped the market in recent months. He commented: “If interest rates fall further, as expected, this will give a further boost to activity and transactions later in the year.”
1 July 2025: End Of Stamp Duty Concessions Cools Market
- June average price slips 0.8% month-on-month
- Annual inflation slows to 2.1% from 3.5% in May
- N Ireland top-performing region with 9.7% annual growth
The annual rate of UK house price growth fell to 2.1% in June, from 3.5% in May, as April’s changes to stamp duty bedded into the market, write Laura Howard and Jo Thornhill.
Nationwide, the UK’s largest building society, said June’s softening in price growth may reflect weaker demand following the increase to the stamp duty nil-rate bands.
It puts the cost of an average UK property in June at £271,619 compared to £273,427 in May, a fall of 0.8%.
In addition to increased stamp duty for buyers, the market is also working against a global backdrop of economic uncertainty, with a question mark over future interest rate cuts.
The Bank of England has made two cuts so far this year to its Bank Rate – the driving force in determining the cost of mortgages – but inflationary pressures have paused any further reductions in the immediate future.
However, Nationwide says it still expects housing market activity to pick up during the summer, with ‘underlying conditions for potential homebuyers remaining supportive’.
Robert Gardner, Nationwide’s chief economist, said: “The unemployment rate remains low, earnings are rising at a healthy pace in real terms (ie, after accounting for inflation), household balance sheets are strong and borrowing costs are likely to moderate a little if Bank Rate is lowered further in the coming quarters as we, and most other analysts, expect.”
Northern Ireland remained the strongest performing region, with annual price growth of 9.7% in June. However, the growth is still under the 13.5% posted for quarter one of 2025. Scotland recorded a 4.5% annual rise, while Wales saw a 2.6% increase.
Across England prices were up 2.5% annually in June, marking a slight softening from the 3.3% annual rise seen over Q1 as a whole.
Average prices in Northern England (North, North West, Yorkshire & The Humber, East Midlands and West Midlands) were up 3.1% year-on-year, while those in Southern England (South West, Outer South East, Outer Metropolitan, London and East Anglia) were up 2.2%.
Within England, the North was the top-performing region, with prices up 5.5%. East Anglia was the weakest performer with annual growth of 1.1%.
Jonathan Hopper, chief executive of Garrington Property Finders, said: “If this trajectory continues, as we expect, the summer months may bring a series of increasingly visible price softening moments, driven not by panic, but by pragmatism.
“Sellers are being forced to adapt to a new normal, and the market data is beginning to reflect this sharp recalibration.”
Separate data from Zoopla’s June house price index also points to a slight slowing of house price rises. It shows annual house price inflation was up by 1.4% in the year to May, but the annual figure was running at 1.6% in both April and March.
Zoopla puts the cost of the average home in the UK at £268,400, in what its experts describe as a ‘steady’ market.
Despite cooling prices, the number of sales being agreed is at its highest in four years, with the number of sales agreed in the four weeks up to 16 June 6% higher than the same period last year.
The number of properties on the market is 14% higher than a year ago, said Zoopla, and the higher volume of supply is also likely to be having a dampening effect on prices.
Zoopla says house price growth is highest in areas where the average property is worth £200,000 or less, where affordability may be less of a constraint. Prices in these areas have risen by 2.7%, on average, in the year to May 2025.
In contrast, areas with higher value homes (where the property average is at £500,000 or more) have seen prices fall by 0.2% in the past year.
18 June 2025: First Slowing Of Annual Inflation Since 2023
- Tax overhaul takes heat out of market
- Annual inflation halves to 3.5%
- Average UK home worth £265,000
Average house prices fell 2.7% month-on-month in April as new nil rate bands for stamp duty kicked in at the beginning of the month, writes Jo Thornhill.
The figures from the Office for National Statistics (ONS), which uses Land Registry data based on completed sales, show prices up by 3.5% annually for the year to April. This is a marked fall compared to the 7% annual increase in March.
The ONS says it is the first slowing of annual house price inflation since December 2023. It ‘coincided with Stamp Duty Land Tax (SDLT) changes’ which came into force for England and Northern Ireland on 1 April. The reduction in the nil rate bands for stamp duty means many home buyers will pay more in tax.
House prices have risen the most in Northern Ireland, where they are up by 9.5% in the year to the end of Q1 2025 (end of March). The average home in the country is now worth £185,037.
Prices are up by 5.8% annually in Scotland, to an average value of £191,061, closely followed by an increase of 5.3% for Wales to £210,077.
Average values have risen by the slowest amount – by 3% in the year to April – in England, taking a typical home to a value of £286,327. The average home across the whole of the UK is now worth £265,000.
Detached properties have seen the biggest annual increases, rising by 5% in the year to April to an average value of £436,380 nationally. Flats rose by 0.6% during the same time to an average of £195,017.
Commenting on the ONS data, Amy Reynolds, head of sales at London estate agent Antony Roberts, said: “A modest uptick in prices is to be expected given that the spring/summer market is traditionally when people move and the market is at its busiest. Unfortunately, another interest rate cut this week is unlikely given today’s inflation figure, which is disappointing as a half-point cut would stimulate growth.
“However, there’s still plenty of money and desire to buy in the core price ranges. Surprisingly, we are seeing a rise in first-time buyer activity even though the stamp duty holiday has ended. Many are receiving help from family and are likely being driven by the pressures in the rental market, where demand far exceeds supply and rental listings have dropped sharply as landlords exit the sector.”
Nathan Emerson at estate agent trade body Propertymark said: “The first half of 2025 has proven very different from the expected trends we would normally witness within the housing market each year.
“We had the effect of stamp duty threshold changes across England and Northern Ireland completely alter consumer habits. The housing market witnessed a sizable uplift in both mortgage approvals and property transactions, as many people looked to complete on their purchase before the April deadline.
“As we progress further into the traditionally busy summer period, we are likely to see momentum regarding house prices. However, this will likely depend on consumer affordability and confidence.”
The government has announced the launch of a publicly-owned and taxpayer-funded National Housing Bank, to ‘turbo-charge’ its target of building 1.5 million new homes over the next five years.
The Housing Bank, a subsidiary of Homes England, the government’s housing agency, will be able to act in partnership with the private house building sector, offering up to £22bn in loans for development of new sites and projects.
16 June 2025: Buyers’ Market Sees Demand And Sales Rise
- Asking prices slide 0.3% in June
- Average asking price up 0.8% year on year
- Sales agreed up 6% annually
New seller asking prices dropped in June by 0.3% on average (down £1,277 in real terms), taking annual asking price house inflation to just 0.8%, writes Jo Thornhill.
The changes, drawn from Rightmove data, take the average asking price across the country to £378,240.
A June asking price dip is unusual, but Rightmove says many new sellers are lowering their price expectations due to competition, with more properties coming to market. According to the property portal, the number of properties for sale is the highest for a decade.
Buyer activity appears resilient, fuelled by falling mortgage rates, increased choice and stable asking prices.
May saw the highest number of sales agreed in any month since March 2022, with the number also up 6% on 2024. Demand is now 3% ahead of this time last year, while the number of homes coming to market is 11% higher.
Regional variations remain pronounced. Previously over-heated markets in London/South East and South West, where average asking prices outstrip the national average, saw the biggest monthly fall.
Prices fell by 1.6% in the South West, taking the average new asking price to £391,885. They were down 1% in the South East to £492,538, while in London they dipped by 0.9%, taking average prices to £695,414, the highest in any region.
Asking prices in the North West, Wales and Yorkshire & The Humber regions have risen the fastest this month.
Prices in Wales rose 0.4% in June, taking the average asking price to £272,381. In Yorkshire & The Humber, prices rose 0.2% to an average of 258,839, while in the North West prices were up 0.9%, the highest monthly rise of any region, to £272,388.
Colleen Babcock at Rightmove said: “We’re now seeing the decade-high level of homes for sale and the recent stamp duty increases have a delayed impact on new sellers’ pricing. Prices have fallen after the records set in April and May.
“Agents have been telling us that sellers need to set a competitive price to have a better chance of finding a buyer, and it looks like many are responding to that message.”
Jeremy Leaf, a London estate agent, said: “The amount of unsold stock is rising and transaction numbers are falling.
“However, the overwhelming majority of agreed sales are holding, although some prices are softening. We are telling sellers who are also buyers but who are receiving little or no interest in their properties, to concentrate on the difference between the two and reduce closer to their bottom line while still leaving room for negotiation.
“New sellers, particularly of flats, need to recognise quickly the buyers’ market conditions and price to stand out from the crowd.”
5 June 2025: Northern Ireland Roars Ahead But London Subdued
- Prices edge down 0.4% in May
- Average values up 2.5% year-on-year
- Typical home worth £296,648
Average house prices increased by 2.5% in the last 12 months, according to Halifax, the UK’s biggest mortgage lender, despite a dip of 0.4% in May.
The value of the average home across the UK stands at £296,648, down from £297,798 in April. In May last year, the average stood at £288,688.
Despite May’s dip, Halifax says the housing market remains stable. Amanda Bryden, head of mortgages at the bank, said: “Average prices fell by 0.4% in May – a drop of around £1,150 – following a modest rise in April.
“These small monthly movements point to a housing market that has remained largely stable, with average prices down by just 0.2% since the start of the year. The market appears to have absorbed the temporary surge in activity over spring, which was driven by the changes to stamp duty.”
Halifax says the outlook for the market in 2025 will depend to a large extent on what happens with interest rates. While the Bank of England cut the benchmark Bank Rate from 4.5% to 4.25% in May, experts are uncertain how far or how quickly it could continue to cut rates this year, as inflation remains stubbornly high.
The next Bank Rate decision is on 19 June.
Regionally, Northern Ireland continues to see the fastest pace of annual property price inflation at 8.6%. The typical home there now costs £209,388, though prices remain well below the UK average.
Wales and Scotland posted strong annual growth of 4.8% in May. Average prices now stand at £230,405 and £214,864 respectively.
Among the English regions, the North West and Yorkshire and the Humber have seen the biggest increases in average prices at 3.7%. The average home in the North West is now worth £240,823, while in Yorkshire it stands at £213,983.
In contrast, London continues to see more subdued growth, with prices rising by just 1.2% in the year to May. The capital has by far the most expensive house prices of any part of the UK with the average property now valued at £542,017.
Jason Tebb at property portal OnTheMarket said: “The market continues to demonstrate remarkable resilience, shaking off external economic concerns.
“Recent cuts to interest rates have been fundamental in boosting confidence and activity. Further rate reductions from the Bank of England will provide much-needed stimulus for the market as the year progresses. Affordability continues to impact what buyers are able or willing to pay.”
Holly Tomlinson, a financial planner at Quilter, said: “The latest Halifax index shows that, while activity has slowed, the market remains surprisingly robust.
“Following the changes to stamp duty thresholds in April, the market saw a clear shift in momentum. Buyers rushed to complete transactions in March to avoid higher tax bills, but activity cooled noticeably in April. Despite this drop in demand, house prices have not fallen off a cliff.
“The fact that prices fell only modestly in May indicates that supply remains constrained and sellers have not yet been forced to adjust their expectations. However, with affordability still stretched and borrowing costs relatively high, the risk of a more prolonged slowdown cannot be ignored.
“Mortgage rates are edging down slightly but for many buyers, this remains a far cry from the ultra-low rates of recent years. For those coming to the end of a fixed deal, the jump in monthly repayments can be significant, adding to the financial strain.
“Looking ahead, market confidence will likely hinge on the timing and pace of interest rate cuts. A more meaningful pick-up in buyer demand may not materialise until there is clearer evidence that mortgage costs are on a sustained downward path. For now, the market appears to be pausing for breath after a frenetic start to the year.”
2 June 2025: Homes In Rural Areas See Biggest Jump In Values
- Average prices up 0.5% last month
- 3.5% annual rise from 3.4% in April
- Typical home worth £273,427
Average house prices rose 0.5% in May, taking the annual rate of increase to 3.5%, according to the latest figures from Nationwide building society.
The lender, which increased its share of the mortgage market from 12.3% to 16.2% in the past year, says the average UK home is now worth £273,427.
Homes in rural areas have risen by 23% in the past five years, compared to an average of 18% for other areas, according to Nationwide, with rural semi-detached properties seeing the biggest price rises.
Nationwide chief economist Robert Gardner said: “Mortgage approvals data suggests that market activity appears to be holding up well following the end of the stamp duty holiday. Despite wider economic uncertainties in the global economy, underlying conditions for potential home buyers in the UK remain supportive.
“Unemployment remains low, earnings are rising at a healthy pace, even after accounting for inflation, household balance sheets are strong and borrowing costs are likely to moderate a little if Bank Rate is lowered further in the coming quarters as we, and most other analysts, expect.”
Data published by Zoopla shows house prices are up by 1.6% annually to an average value of £268,250. The online property portal says it was the busiest May for home sales agreed since the 2021 pandemic.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Last month’s interest rate cut from the Bank of England gave the housing market and wider economy a timely boost following the end of the stamp duty concession.
“Lenders have been reducing mortgage rates and enhancing loan-to-income ratios, increasing the size of loan that some borrowers can access. However, while the borrowing environment may be easing, higher inflation and the wider economic picture remains a concern, which could mean the pace and size of further base rate reductions is more gradual than markets thought only a few weeks ago.”
David Johnson, managing director of property consultancy INHOUS, said: “Buyer demand picked up immediately after the bank holidays and has remained strong throughout May. This level of buyer motivation has resulted in the majority of sellers receiving multiple offers and achieving their asking price. One and two-bedroom apartments remain particularly sought-after, as well as larger family homes in and around commuter hotspots.”
Mortgage approvals for house purchase fell by 3,100 to 60,500 in April, according to the latest data from the Bank of England’s Money and Credit report. The figures are unsurprising given the lowering of stamp duty thresholds on 1 April, which means many buyers will pay more in the tax.
21 May 2025: Longer-Term Outlook ‘Cautious’
Average house prices increased by 6.4% – or £16,000 in real terms – in the year to March, according to the latest government data, writes Jo Thornhill.
It takes the value of the average UK home to £271,000, according to the Office for National Statistics (ONS), which uses Land Registry data from completed residential sale prices.
The March rise is up on the 5.5% annual increase recorded in February. However, market experts believe the road ahead could be bumpy for mortgage rates following a sharp rise in inflation to 3.5% in April, which will add a dose of caution to the market.
It means interest rates may not fall as quickly as many borrowers hoped, as the Bank of England uses Bank Rate to control rising inflation.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, commented: “At first glance, the ONS figures demonstrate market resilience with activity shrugging off recent economic uncertainties at home and abroad. However, on the ground we are seeing a different story.
“Although this is the most comprehensive of all the housing market surveys, as it includes mortgaged and cash transactions, these numbers reflect activity and pricing over the past few months.
“In the past month or so, many buyers and sellers are pressing the pause button and sitting on their hands. The recent cut in mortgage rates has restored some confidence but April’s sharp rise in inflation will not help.”
The regions
The North East of England saw the biggest jump in property prices, with double digit increases, on average. The 14.3% rise in the region has taken the average home to a value of £168,227.
In contrast, the slowest rate of growth has been in London, where the annual increase in the year to March stood at 0.7%. The capital is still home to the highest average house prices at £552,073.
Elsewhere, the average price in England increased by 6.7% annually to £295,654. Northern Ireland saw a rise of 9.5% (in the year to the end of the first quarter of 2025), where house prices average £185,037.
Wales posted a 3.6% rise in year to March to £208,093, while Scotland saw a 4.6% average rise to £185,939.
Gareth Lewis, managing director of specialist lender MT Finance, said: “House prices continue to rise because the quality of stock being sold is good but there is plenty of overpriced stock which is sitting on the market for too long and not selling.
“Swap rates had already priced in the recent jump in inflation. But this increase in inflation makes it harder for the property market as, with the stamp duty concession no longer available from April, stimulus at the moment is coming from [mortgage] rate reductions.”
The ONS data also found the rise in monthly private rent eased slightly in the year to April, at 7.4% to £1,335. This annual growth rate was down from 7.7% recorded in the 12 months to March.
However, a survey of tenants by the flatshare website SpareRoom has found that one-in-seven don’t think they’ll ever get onto the property ladder, with a further one-in-three uncertain of when this could happen.
The research shows the rent burden is intensifying, with around a quarter of renters spending more than 50% of their take-home pay on rent and three-quarters spending more than 30%.
19 May 2025: Stamp Duty Changes Take Edge Off Buyer Appetite
- Average prices up 1.2% in year to May
- Typical home worth record high £379,517
- Buyer demand down 4%, sales agreed up 5%
The asking price of the average home coming to market in May has increased by 1.2% year on year, according to the online property portal Rightmove, writes Jo Thornhill.
But while new seller prices rose by 0.6% for the month, taking the average asking price nationally to a record high of £379,517, the monthly increase is the lowest seen in the traditionally busy Spring season since 2016, reflecting a more subdued market.
There has also been a dip in new buyer demand, according to Rightmove, which it says is likely due to the reductions to the stamp duty nil rate bands in April. The changes will see many home buyers paying more tax when they buy.
Demand saw a 4% drop in April after a busy March, according to estate agents, although demand over the 12 months to date is still 3% higher than in the previous 12 months. And despite the lull in buyer appetite, the number of sales agreed is 5% higher than a year ago.
The number of new properties coming onto the market is 14% higher than this time last year, and Rightmove says the overall supply is at a 10-year high. But with the supply of homes for sale outstripping demand, sellers will need to be realistic with pricing.
Colleen Babcock at Rightmove said: “It’s another new price record this month, but having seen a May price record for the last five years, it appears to be driven more by seasonal factors given that new buyer demand has slowed. The 10-year-high choice of homes for sale means sellers need to be aware of the competition they’re facing for the attention of buyers, and the prices that are being advertised in their location.
“Buyers may have several similar homes to choose from in their area, and a home which appears over-priced compared may not get a second look. This month’s price increase being the lowest in May for nine years is a sign of a market that favours buyers and is more subdued than usual.
“Despite April’s dip in demand, there are signs of a bounce-back in May. Mortgage interest rates are lower than they were this time last year, and the recent Bank Rate cut gives us some optimism for further mortgage rate drops.”
Regionally, asking prices have risen most in North of England, Scotland and Wales, while prices have risen by the slowest amount in London, South of England and East of England.
The North West has seen the biggest rise in prices in the year to May at 3.9%, taking the average new asking price to £269,992. In contrast, asking prices are up by 0.6% in the South East region, where the average price stands at £497,475.
Prices rose by 0.4% in London in May, taking the annual rate of increase to 0.7%. Average asking prices in the capital are still the highest of any other region of the country at £701,990.
David Johnson at property consultancy INHOUS said: “Demand picked up immediately after the bank holiday and has remained strong throughout May. This level of buyer motivation is resulting in the majority of sellers receiving multiple offers and achieving their asking price. One and two bedroom apartments are particularly sought-after as well as larger family homes in and around commuter hotspots.”
Tomer Aboody at MT Finance said: ‘With higher supply of stock for sale, buyers have been more spoilt in choice, which is reflected in the lower growth in asking prices. As interest rates reduce, we should see affordability increase which in turn will encourage buyers to be active. This should produce a more buoyant market with higher transaction levels.”
8 May 2025: Interest Rate Cut Likely To Increase Demand
House prices rose 0.3% in April, taking the annual inflation figure to 3.2%, according to mortgage lender Halifax, writes Jo Thornhill.
While the monthly rise recorded was relatively modest, it reversed the fall of 0.5% in average prices seen in March.
The April increase takes the average UK home value to £297,781.
If, as expected, the Bank of England cuts interest rates today (8 May), lower mortgage rates are likely to fuel housing market activity and price rises.
Amanda Bryden, head of mortgages at Halifax, said house prices have been remarkably stable over the last six months, particularly given global economic and political uncertainty: “The market continues to show resilience despite a subdued economic environment and risks from geopolitical developments.
“Stamp duty changes [reductions to the nil rate band from 1 April] prompted a surge in transactions in the early part of this year, as buyers rushed to beat the tax-rise deadline. However, this didn’t lead to a significant increase in property prices, with the last six months characterised by a stability in prices rarely seen since the pandemic.
“While the market has cooled slightly since this rush, buyer activity remains strong in comparison to recent years.”
Regionally the north-south divide continues. Northern Ireland, Wales and Scotland recorded the strongest annual growth across the UK, with all three nations outpacing regions in England.
Northern Ireland saw the highest level of annual property price inflation, rising by 8.1% in March, taking the average home to a value of £208,220.
Wales posted the next highest rate of annual house price growth, increasing by 4.7% in the year to April. The average house price now stands at £229,079.
Average prices in Scotland have risen by 4.6% year-on-year and a typical home in the nation is now valued at £214,011.
The strongest annual price growth across English regions was recorded in the North West at 4.1% in the year to April. The average home in the region is now £240,975.
Southern regions of England lag behind, with the South West recording the lowest level of average house price inflation at 0.9% annually. The average home here is now £304,451.
Halifax says London continues to see more subdued annual house price growth at 1.3% in the year to April. But the capital remains the most expensive market with an average price tag of £543,346.
Mark Harris at broker SPF Private Clients said: “As lenders cut mortgage rates and ease affordability criteria, borrowers are being given more options. With an increasing number of mortgages pegged at the psychologically important sub-4% level, there is less of a barrier for those who need to borrow to buy a home.
“Swap rates, which underpin the pricing of fixed-rate mortgages, continue to decline. A quarter-point rate cut from the Bank of England is expected today, which would further ease affordability, boost confidence and give buyers renewed confidence to make their move.”
Matt Thompson at estate agent Chestertons said: “In April, some house-hunters paused their search amid the Easter holidays, but sellers remained motivated, which resulted in an uplift in the number of properties put up for sale.
“A cut to interest rates would also have an [immediate] impact on buyer activity as more house hunters will feel motivated to start or finalise their search, which will fuel a busier-than-usual summer market.”
30 April 2025: Values Rise 3.4% Annually But See Monthly Fall
- House prices rise 3.4% year on year
- Price growth fell by 0.6% in April
- Average home worth £270,752
House prices fell by 0.6% in April, taking the annual house price inflation figure to 3.4% (down from 3.9% in March), according to the latest figures from Nationwide building society’s house price index, writes Jo Thornhill.
Robert Gardner, Nationwide’s chief economist, said the softening in price increases was widely expected given the changes to stamp duty that came into force on 1 April. The reduction to the nil rate band of stamp duty for homebuyers means many, including first-time buyers, will pay more in tax when they buy a property.
Gardner said: “Early indications suggest there was a significant jump in transactions in March, with buyers bringing forward their purchases to avoid additional tax obligations.
“The market is likely to remain a little soft in the coming months, following the pattern typically observed following the end of stamp duty holidays. Nevertheless, activity is likely to pick up steadily as summer progresses, despite wider economic uncertainties in the global economy, since underlying conditions for potential home buyers in the UK remain supportive.
“Unemployment remains low, earnings are rising at a healthy pace in real terms (after accounting for inflation), household balance sheets are strong and borrowing costs are likely to moderate a little if Bank Rate is lowered further in the coming quarters as we and most other analysts expect. Indeed, swap rates, which underpin fixed rate mortgage pricing, have moderated in recent weeks.”
Residential property sales increased by 62%, up to 177,370 in March from 109,700 in February, according to HMRC transaction data published today (30 April). The rise, the third highest month-on-month increase since records began, was linked to the changes to the nil rate bands for stamp duty.
Jason Tebb, president at property website OnTheMarket, said: “Affordability remains an ongoing concern with rates still higher than many borrowers have grown used to, combined with the high cost of living and other pressures.
“Lenders have been trimming mortgage rates in recent days and further action from the Bank of England [the next interest rate decision is on 8 May] should enable this trend to continue, giving buyers who rely on mortgages increased confidence to make their move.
“With more property stock on the market as one would expect at this time of year, average house prices are being held in check, although local markets and even individual properties can vary considerably.
“Buyers on the whole remain sensitive on price and keen to negotiate because of affordability pressures, so sellers should seek advice from local agents and price accordingly.”
What will happen to mortgage rates and house prices in 2025?
House prices cool as demand slows, says Zoopla
According to property portal Zoopla, average house prices rose 1.6% in the year to March. This compares to the 0.2% annual inflation recorded in March 2024 but is down from 1.9% in December 2024.
Zoopla says buyer demand is up 1% year on year, tempered in the first few months of 2025 by the changes to stamp duty.
The stock of homes for sale is 12% higher than a year ago as more sellers enter the market, possibly buoyed by falling mortgage rates, while the number of sales agreed is 6% higher than at the same point in 2024.
Zoopla’s property experts believe the loosening of mortgage lenders’ stress tests for affordability, prompted by calls from the regulator the FCA to relax stress tests, could boost buying power by up to 20%, which would further support sales.
Richard Donnell at Zoopla said: “Buyer demand has cooled in recent weeks as the supply of homes for sale continues to expand, slowing house price inflation. We expect continued growth in sales agreed, and slow but steady house price inflation.”
16 April 2025: Average Home Now Worth £268,000
The average property price was unchanged in February, according to the latest data released by the Office for National Statistics, but year-on-year values are up by 5.4%, writes Jo Thornhill.
The ONS data is based on completed transactions rather than, for example, asking prices, and is thus one of the most accurate reflections of house prices. The index shows that the average home in the UK is now worth £268,000 (February 2025), £13,000 higher than a year ago.
Transaction figures were also up in February. The number of sales was 28% higher than in February 2024, and 13% higher than in January 2025. This likely reflects buyers’ desire to complete their purchase in the run-up to changes to the stamp duty regime that would have seen them paying more tax from 1 April.
The ONS house price data comes as inflation figures out today show the rate of price increases across the economy fell slightly in the year to March to 2.6% from 2.8% in February.
The drop could encourage the Bank of England to reduce interest rates at the next meeting of its Monetary Policy Committee on 8 May, which would be a further boost to the property market in the wake of the Stamp Duty changes.
According to the ONS, average prices rose in the 12 months to February across the UK. They increased by 5.3% in England to reach an average of £291,640, by 4.1% annually in Wales to reach £207,382, and by 5.7% in Scotland, where average prices are now at £185,870.
In Northern Ireland, the average home increased in value by 9% in the year to the end of the fourth quarter of 2024, the latest data available. A typical property here is now worth £183,259.
Within English regions, the north-south divide remains, with the North West seeing annual price growth of 8% (the average property is now £211,977), for example, while in London prices have gone up by just 1.7% in the same time (average homes in the capital are now worth £555,625).
Semi-detached and terraced homes have seen the largest annual increase in average prices at 6.1% and 6.2% respectively. A typical terraced home is now worth £225,486, while a semi-detached home is worth £270,925, on average.
Flats have risen by the smallest amount year on year at 3%, taking the value of a typical flat to £196,110.
Mark Harris, chief executive at mortgage broker SPF Private Clients, said: “The dip in inflation to 2.6% is encouraging news as far as future interest rate movements are concerned, and if this downward trend continues, it will make it easier for the Bank of England to cut rates again sooner rather than later.
“Another rate reduction would help boost affordability and would be particularly timely now that the stamp duty concession has ended.
“On the mortgage front, several lenders have cut fixed rates, although the best deals aren’t hanging around for long.”
Karen Noye, mortgage expert at advisor Quilter, said: “February’s house price figures show the market holding steady on a monthly basis, but still growing firmly on the year. This suggests a housing market that continues to defy expectations.
“But while house prices have picked up in recent months, the outlook remains mixed. Regional differences are stark and affordability pressures haven’t gone away. But if mortgage rates continue to ease and confidence builds, this spring could mark a turning point for both buyers and sellers.”
Source: ONS (April 2025)
14 April 2025: Buyer Demand Up 5% In Resilient Market
The average asking price of homes coming to market reached a record high of £377,182 in April, according to data from property portal Rightmove, writes Jo Thornhill.
This suggests increased demand across the market despite the stamp duty changes that came into force on 1 April, bumping up property tax bills for many buyers.
The latest monthly increase to average prices was recorded at 1.4% while annual house price inflation is running at 1.3%.
The monthly rise in average prices is bigger than the increases typically seen at this time of year, according to Rightmove, even with a decade-high number of homes for sale. Higher values have been fuelled by an increase in buyer demand, up 5% compared to April 2024. The number of sellers coming to market is up 4% annually.
The increase in choice of homes for sale and increased buyer demand points to resilience in the housing market, according to Colleen Babcock, property expert at Rightmove: “Confidence from new sellers is a good sign for the overall health of the market, but they do need to be careful when setting their asking price.
“The high level of supply right now means buyers are likely to have plenty of homes in their area to choose from, and an overpriced home will stick out for the wrong reasons.
“It’s important to remember that among records and national trends, the [country’s] housing market is made up of thousands of diverse local markets, each uniquely responding to market changes and world events. London, for example, is likely to see greater knock-on effects from the United States trade tariffs than the rest of the country, while Northern regions appear to be performing more strongly post-stamp duty rise.
“It’s difficult to predict what the next few months will bring, but if mortgage rates reduce more quickly, it would be a helpful boost to buyer affordability.”
There is a growing belief that the Bank of England will cut its benchmark Bank Rate from its current 4.5% to 4.25% on 8 May, its next scheduled decision, with up to three further cuts expected during the year. This would trigger reduced mortgage rates and stimulate demand.
Interest rates are likely to fall if the Bank feels the economy is facing recessionary threats as a result of an international trade war triggered by the imposition of import tariffs by the US and retaliatory action, primarily by China.
Rightmove says that, regionally, Scotland and northern regions of England have seen the biggest annual increase in asking prices. The average price in Scotland rose 2.6% year on year to £200,593, while in the North West of England prices are up 2.6% to an average of £266,408. In the North East prices are up 2.2% annually to an average of £194,213.
Annual growth has been slowest in London and the South West of England at 0.4% and 0.2% respectively in the year to April. The average asking price of a home in the South West now stands at £394,342, while London has the highest asking price of any region at £699,200.
Nathan Emerson at estate agent trade body Propertymark said: “It is encouraging to witness the market continue to deliver growth, despite the increasingly complex economic challenges we face. Although the rush from many people in England and Northern Ireland to beat Stamp Duty threshold changes has concluded, we now progress into the spring and summer months, which typically deliver strong momentum.
“We remain in a position where inflation is on a potential uneven footing, and this may impact any decision the Bank of England might make regarding interest rates when they next meet on 8 May.”
7 April 2025: Global economic uncertainty causing ‘buyer worries’
- Average prices down 0.5% in March
- Prices up 2.8% year on year
- March sees record day of sales
- Typical property now £296,699
Property prices took a hit in March, falling by 0.5% (£1,575 in real terms) on top of a 0.2% drop in February, according to Halifax, the UK’s biggest mortgage lender.
The fall in prices is being linked to reduced buyer demand in the run-up to reductions to stamp duty nil rate bands that came into force on 1 April.
The changes to stamp duty saw fewer house-hunters looking to buy in the past two months, fearing their sale would not complete before 1 April and they would pay more in tax.
But Halifax says many buyers did beat the deadline, with more sales completed in March than in January and February combined. It also recorded its busiest ever day of transactions during the month.
Year-on-year house prices were up by 2.8% in March, taking the value of the average home to £269,699, according to Halifax.
What will happen to mortgage rates and house prices in 2025?
Amanda Bryden, head of mortgages at Halifax, said: “House prices rose in January as buyers rushed to beat the end of March stamp duty deadline. However, with those deals now completing, demand is returning to normal and new applications slowing.
“Following this burst of activity, house prices, which remain near record highs, unsurprisingly fell back last month. Looking ahead, potential buyers still face challenges from the new normal of higher borrowing costs, a limited supply of available properties to choose from, and an uncertain economic outlook.
“However, with further base rate cuts expected alongside positive wage growth, mortgage affordability should continue to improve gradually, and therefore we still expect a modest rise in house prices this year.”
What’s happening with house prices?
Regional divide in house price inflation
Northern Ireland has seen the biggest annual rise in average horse prices, according to Halifax’s data. Prices here are up 6.6% year on year in March, with a typical home now worth £206,620.
Prices in Scotland, Wales and the northern regions of England have also seen relatively high growth in the year to March. Prices are up 4.3% in Scotland to an average of £213,750. In Wales average prices are up 3.7% to £227,322, while in Yorkshire and Humber they are up 4.2% to £215,807.
In contrast, prices have risen the least in the East of England, southern regions of England and Greater London. Prices are up a nominal 1% in the South West, for example, where the average home is now worth £304,091. In Greater London prices have risen 1.1% to an average of £543,370.
Jeremy Leaf, a north London estate agent, said: “There’s no doubt many purchases were brought forward as a result of the stamp duty deadline, so we might have expected to see more impact in the data.
“Buyers and sellers who missed out on the stamp duty savings had the choice to stay put, keep to previously-agreed terms and continue with their move or try to re-negotiate in an attempt to find some middle ground. The last option has proved the most popular in our offices.
“However, worries about short and longer-term economic prospects both here and abroad have been driving that decision-making (or lack of it) over the past few weeks at least.”
Karen Noye, mortgage expert at financial advisor Quilter, said: “The housing market’s resilience is wavering with a second monthly decline in prices. Borrowing still remains expensive by historic standards. The traditional spring bounce appears to be more muted than usual.
“Adding to this, the news of tariffs might start to spook would-be buyers as once again unpredictability seeps into the market. But swap rates which dictate fixed-rate mortgage deals have tumbled as traders speculate that there could now be further rate cuts to fuel economic growth in the face of the impact of the tariffs.
“Affordability therefore could improve at least in the near term.”
1 April 2025: Northern Ireland Posts Double-Digit Annual Growth
- Prices up 3.9% year on year
- Monthly change flat
- N Ireland sees 13.5% annual growth
House prices remained stable in March, rising 3.9% annually on average, according to data from Nationwide building society, writes Jo Thornhill.
It was the same annual rise as recorded in February, following no change in month-on-month for average prices in March. The average home across the UK is now worth £271,316, according to the lender’s figures.
Regionally, Northern Ireland has seen the largest annual increase in average prices at 13.5%, pushing the average price locally to £205,796.
London was the worst-performing area for price rises, with an annual increase of 1.9%. The capital still has the most expensive homes, on average, at £529,369.
Overall there continues to be a north-south divide in the performance of house prices, with the top six areas in the north of the UK, while the lowest-performing six are in the south of England.
Robert Gardner, Nationwide’s chief economist, said: “These price trends are unsurprising, given the end of the stamp duty holiday at the end of March (transactions associated with mortgage approvals made in March, especially toward the end of the month, would be unlikely to complete before the deadline).
“The market is likely to remain a little soft in the coming months since activity will have been brought forward to avoid the additional tax obligations – a pattern typically observed in the wake of the end of stamp duty holidays.
“Nevertheless, activity is likely to pick up steadily as the summer progresses, despite wider economic uncertainties in the global economy, since underlying conditions for potential home buyers remain supportive. The unemployment rate is low, earnings are rising at a healthy pace in real terms (after accounting for inflation), household balance sheets are strong and borrowing costs are likely to moderate a little if Bank Rate is lowered further in the coming quarters as we and most other analysts expect.”
Nathan Emerson, chief executive at estate agent trade body Propertymark, said: “The housing market has witnessed an extremely encouraging start to the year with sustained house price growth year on year. Although we now sit at the very start of the amended stamp duty thresholds for England and Northern Ireland, we remain optimistic to see strong market momentum across the entire UK, as we head towards the traditionally busy summer months.
“Although we are still seeing fluctuations within the rate of inflation, and a much needed cautious approach from the Bank of England regarding base rates, we are starting to see enormously welcome sub-4% mortgage deals offered by some lenders.”
The Bank of England’s latest Money and Credit report shows gross mortgage lending, which topped £24.3 billion in February, is at its highest level since November 2022, when it reached £24.9 billion.
However, the number of mortgage approvals dropped by 600 to 65,500 in February. This is a measure of borrowers remortgaging to a new lender – it does not record new mortgages with an existing lender (known as a product transfer). It followed a fall of 400 in January.
Remortgage approvals were also down by 800 to 32,000 in the period, following an increase of 2,100 in January.
Mark Harris, chief executive at mortgage broker SPF Private Clients, said: “With mortgage approvals falling only slightly in February, it’s steady-as-she-goes for the market.
“Remortgaging numbers dipped, perhaps suggesting that borrowers are sticking with their existing mortgage provider rather than shopping around and going through the hassle of applying to another lender.”
26 March 2025: Zoopla Sees Return Of Buyers’ Market
- Prices rise 4.9% in year to January
- Month-on-month rise at 0.2%
- Typical home priced £269,000
House prices rose, on average, by 4.9% in the year to January, according to government data from the Office for National Statistics, writes Jo Thornhill.
Zoopla, the online property portal, has reported house price inflation cooling in February, with an annual price increase of 1.8% compared to a rise of 1.9% in January (more on Zoopla’s latest data below).
The annual price rise recorded by the ONS, which uses official property transaction data from the Land Registry to compile its index, takes the average home in the UK to a value of £269,000 – £13,000 higher, in real terms, than a year ago.
The monthly figures show prices rose, on average, by 0.2% between December 2024 and January 2025, compared with a fall of 0.1% in the same period 12 months ago.
It comes as the ONS’s report into housing affordability, published earlier this week, shows affordability has returned to pre-Covid levels, after the situation worsened in 2020-21. The average home (at £269,000) is 7.7 times the median average salary of £37,600 a year.
During the pandemic in 2021, the average home value was more than nine times average earnings.
ONS regional data reveals Northern Ireland has seen the biggest price increase, recording a rise of 9% in average values in the year to the end of the fourth quarter of 2024. It takes the average property value in the country to £183,259.
Prices have risen by 6% in the year to January 2025 in Wales, to an average of £209,579, while prices are up by 4.6% over the same period in Scotland, to £187,434.
Among English regions, prices have grown most in the North East, increasing by 9.1% to £161,373 in the 12 months to January 2025. London was the English region with the lowest annual inflation, where average prices are up by 2.3% annually to £563,899.
Terraced and semi-detached homes have increased in value the most over the past 12 months, according to the ONS, rising by 5.9% and 6% respectively. A typically semi-detached home in the UK is now worth £271,027. In contrast, the value of flats has risen by 2.3% over the same period to an average of £196,069 nationally.
Source: ONS
Commenting on the ONS figures, Jeremy Leaf, a north London estate agent, said: “The modest increase in prices confirms what we have seen in our offices – a steady rise kept in check by improving stock levels.”
Zoopla house price index
Zoopla says the housing market is showing signs of resilience, despite the looming stamp duty changes and interest rates not falling as quickly as borrowers had hoped.
Its data shows there are 11% more homes for sale (for the four weeks to 16 March) compared to the same period last year, and 5% more sales agreed. But it says the supply of homes is currently outstripping demand, particularly in London and the south of England, which is acting to suppress prices (house price inflation is running at just 1.8% year on year).
Richard Donnell at Zoopla said: “Buyers have a wide choice of homes for sale which will keep price inflation in check. Sellers need to be very careful in how they price their homes if they are serious about moving in 2025.”
Among UK cities prices have risen the most over the past year include Belfast (up 5.7%) to an average of £183,900 and Liverpool (up 3%), where the average home is now worth £162,000, according to Zoopla.
Eight out of the nine cities which have seen the lowest annual price growth are in the Midlands or south of England, including Bristol, London, Oxford, Bournemouth and Southampton.
17 March 2025: Stamp Duty Deadline Pushing More To Market
- Asking prices up 1.1% in March
- Agreed sales up 9% year-on-year
- Average asking price £371,800
The property market is seeing a robust start to the year, according to the latest data from Rightmove, with average asking prices rising 1.1% in March and prices up 1% compared to 2024, writes Jo Thornhill.
Compared to the same period last year, 9% more sales were agreed. In addition, the number of properties being listed for sale is at its highest level since 2015, which is good news for buyers as increased supply should subdue price rises.
Experts say the surge in activity is likely due to buyers and sellers trying to beat stamp duty tax changes on 1 April, which will affect the market in England and Northern Ireland. The nil rate band thresholds for first-time and other buyers are set to fall, leading to bigger tax bills for most.
The average home coming to market is now valued at £371,870 by Rightmove, which is £3,876 more than in February and in line with the long-term average increase in prices seen in March.
Colleen Babcock, property expert at Rightmove, said: “Historic averages show that March is likely to be one of the strongest months of the year for sellers to spring into action. However, sellers can’t just rely on these historic averages for success, as this year they are facing a decade-high level of competition.
“The big milestone ahead is the stamp duty deadline, and with a massive log-jam of 575,000 moves going through the legal completion process, many cost-conscious buyers will be doing all they can to get their move over the line and avoid unnecessary extra tax.”
Mortgage rates are only slightly lower now than at this time last year, according to Rightmove data, which means buyer affordability remains stretched. Its figures show the average five-year fixed mortgage rate is 4.74%, down from the peak of 6.11% in July 2023, but only marginally lower than the 4.84% recorded this time last year.
The outlook is for mortgage rates to fall, albeit slowly. The Bank of England cut the benchmark Bank Rate in February from 4.75% to 4.5%. Its next meeting to decide on the Bank Rate level is on Thursday 20 March, when it is expected to keep rates on hold at 4.5% as the annual inflation rate increased in January from 2.5% to 3%.
The Bank uses high interest rates to cool the economy and bring the rate of price increases down.
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: “Swap rates [the interest rates banks use to lend to each other in wholesale markets] largely dictate the pricing of fixed-rate mortgages, and a recent decline in pricing has enabled lenders to launch cheaper mortgage rates this month.
“In theory, even if the Bank of England holds base rate at 4.5% in March, the pricing of fixed-rate mortgages could still decline if swap rates continue on a downward trajectory.”
Regional variations in asking prices
Asking prices rose, on average, in every region in England, Wales and Scotland in March, according to Rightmove. But on an annual basis, price rises show a distinct north-south divide.
While prices are up by 4% in Scotland over the past year (the average asking price is £197,643), up by 2.4% in Yorkshire and The Humber (£252,957) and by 2.6% annually in the North West (£263,855), annual rises are more modest in the south.
Prices are up year on year by 1.2% in the East of England (average asking price £420,120) and 0.6% in the South East (£481,890), and they fell by 0.3% in the South West (£382,637).
In London the year on year increase is 1.3% which takes the average asking price of a property in the capital to £695,885.
Matt Thompson, head of sales at estate agent Chestertons, said: “As we are seeing the beginning of spring this month, agents are preparing for what is historically known as one of the busiest times of the year for the property market.
“2025 was off to a strong start with increased buyer demand and we foresee this level of buyer motivation to intensify by the end of March. The majority of sellers are aware of the heightened market activity which has also led to an uplift in the number of vendors planning to put their property on the market in due course.
“While this will provide house hunters with a slightly larger pool of properties to choose from, we still expect to see several buyers compete over a single property.”
7 March 2025: Demand Wanes As Stamp Duty Hikes Loom
- House prices slip 0.1% in February
- Annual growth steady at 2.9%
- Average UK home worth £298,602
The average UK house price fell by 0.1% in February, wiping just £213 from its total value to leave it at £298,602, writes Laura Howard.
The UK’s largest mortgage lender puts the cost of an average home at £298,602 compared to £298,815 the previous month, which saw a 0.6% monthly rise. Annual growth held fast at 2.9%, unchanged from January.
While mortgage deals have become more competitive in recent weeks, demand is waning as the 1 April deadline for stamp duty concessions comes closer, leaving new buyers insufficient time to complete their property purchase, said Halifax.
Most UK regions saw a slowdown in house price inflation in February. On an annual basis, Scotland saw growth accelerate at the fastest rate in 13 months to 3.8%, up from 2.5% in January. Average house prices in the country now stand at £213,014.
The strongest annual property price growth, however, continues to be in Northern Ireland, which remained unchanged in February at 5.9%. Properties in Northern Ireland now cost an average of £205,784.
In Wales, annual house prices were up by 2.8% in February, with the average property valued at £226,811.
In England, the Yorkshire and Humberside region recorded the strongest annual growth – up 4.1% compared to the previous year, with properties costing an average of £216,130.
The traditionally strongest parts of the English housing market saw the weakest growth. In the South East, annual growth was at 2.2% in February, while in Greater London it stood at 1.6%, down from 2.6% in January.
However the capital still has the most expensive homes, with an average value of £545,183.
Amanda Bryden, head of mortgages at Halifax, said: “While house price growth has slowed overall, market activity remains strong and comparable to pre-pandemic levels, demonstrating a resilience amongst buyers that’s been evident in the face of higher borrowing costs.”
Ms Bryden added that an ongoing shortage of housing supply coupled with sustained demand suggests that property prices will continue to rise this year, albeit at a more measured pace compared to 2024.
Matt Smith at property portal Rightmove said the weeks before the changes to stamp duty thresholds on 1 April are likely to see frenetic activity: “As the deadline edges nearer, we expect a rush to complete from those in the process of buying a home, particularly from affordability-stretched first-time buyers eager to avoid unnecessarily parting with thousands of extra pounds.”
28 February 2025: Prices Up Despite Tougher Affordability
- House prices rise 0.4% in February
- Property values up 3.9% annually
- Average home now worth £270,493
House price inflation remained stable at 0.4% in February, according to Nationwide writes Jo Thornhill. The monthly rise was up from the near-flat 0.1% growth in prices recorded in January 2025.
Year-on-year house prices have risen by an average of 3.9% according to the building society, revealing notable resilience in the market during 2024 despite higher mortgage rates. The average property is now worth £270,493.
Robert Gardner, chief economist at Nationwide, commented: “Housing market activity has remained resilient in recent months, despite ongoing affordability challenges. Indeed, the second half of 2024 saw a noticeable pick-up in total housing transactions, which were up 14% compared with the same period in 2023.
“However, taking 2024 as a whole, transactions were still modestly (6%) lower than the levels prevailing before the pandemic struck in 2019.
“It is notable that first-time buyer activity continued to recover, with mortgage completions in 2024 just 5% below 2019 levels. This represents a solid performance, given the interest rate environment.”
Housing transactions, as recorded by stamp duty receipts received at HMRC, also support signs of a resilient market. The government data shows 95,110 sales were completed in January, which is 14% higher than in January 2024 and just 1% lower than in December 2024.
Matt Thompson, head of sales at estate agent Chestertons, said: “February’s property market saw a decline in first-time buyer enquiries as the chances of finding a property in time to beat the changes to stamp duty are now nil.
“We did, however, see continuous demand from other buyer demographics; especially after the Bank of England announced a rate cut to 4.5% in January. With the news of sub-4% mortgages returning to the market, we expect more house hunters to start their search over the coming weeks.”
Stamp duty thresholds will change from 1 April 2025 for home buyers in England and Northern Ireland. For first-time buyers the nil-rate band threshold for stamp duty will fall from £425,000 to £300,000. It will also only apply to homes worth up to £500,000, rather than the current £625,000.
The standard nil-rate band for stamp duty for all other residential buyers is set to drop from £250,000 to £125,000.
7 January 2025: Northern Ireland Records Strongest Growth
- House prices increase 3.3% annually
- Values drop 0.2% in December
- Average home worth £297,166
Average property values increased by 3.3% in 2024 but finished the year with a marginal 0.2% fall in December, according to the latest data from Halifax, writes Jo Thornhill.
The UK’s biggest mortgage lender says the average home now costs £297,166.
Across the UK, Northern Ireland saw the strongest price growth last year, with typical values rising 7.4% to push the average to £205,895.
In Wales, average prices rose by 4.6% to £226,646, while in Scotland prices edged up more slowly, by 2.4%, to an average of £209,959.
Among the English regions, prices in the North West saw the biggest annual rise, at 5.3%. A typical home in the North West now costs £238,832.
London, which has the highest average house prices in the UK at £547,614, saw average values rise by 3.3% in 2024.
Amanda Bryden, head of mortgages at Halifax, said: “While the housing market has been supported in recent months by falling mortgage rates, income growth and the announcement on upcoming stamp duty policy changes, mortgage affordability will remain a challenge for many, especially as the [Bank of England] Bank Rate is likely to come down more slowly than previously predicted.
“However, providing employment conditions don’t deteriorate markedly from a more recent softening, buyer demand should hold up relatively well and, taking all this into account, we’re continuing to anticipate modest house price growth this year.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Modest house price growth is being underpinned by borrowing costs which, while softening, remain higher than many borrowers were paying just a few years ago.
“With HSBC, Halifax and Leeds Building Society among those lenders reducing some of their mortgage rates this month, the new year has got off to an encouraging start. Borrowers will be hoping that other lenders follow suit and that the Bank of England delivers further rate reductions, helping ease affordability concerns.”
Karen Noye, mortgage expert at Quilter, said: “Despite the challenges it faced throughout 2024, the housing market ended the year looking considerably stronger than many might have anticipated 12 months ago.
“December is typically a quiet month while the festivities take centre stage and other plans such as moving home are put on the back burner. This was reflected in Halifax house price index, with a slight 0.2% decrease in house prices in December. However, on an annual basis, prices rose by a solid 3.3%.
“This annual growth is indicative of a remarkable level of resilience within the housing market. It has battled ongoing headwinds of high borrowing costs and affordability pressures for a long while now, yet demand seems to have been sustained and the market may even now be adjusting to the ‘new normal’ of higher but more stable interest rates.
“2025 will not be without its fair share of challenges, however, and the changes to stamp duty, which are due to come into effect in April, could weigh heavily. For first time buyers, the impact will be keenly felt.”
From 1 April 2025 the nil rate band allowance for Stamp Duty Land Tax (SDLT) in England and Northern Ireland will be cut.
The starting threshold for SDLT for those who are not first-time buyers will revert back to £125,000 (from its current £250,000). Stamp Duty at a rate of 5% will need to be paid on the value of the property above £125,000 up to £925,000.
The discount tax relief on SDLT for first-time buyers is also being cut from April this year. It means the nil rate band threshold for first-time buyers (only where buying a home worth up to £500,000) will fall from £425,000 to £300,000. Previously the cap on the total property value for the SDLT relief to apply was £625,000.
First time buyers will then pay 5% tax on the portion from £300,001 to £500,000.
But if the property price is over £500,000 (currently £625,000) from 1 April 2025, first time buyers must follow the same SDLT rules as people who’ve bought a home before.
In Scotland, the starting threshold for Land and Buildings Transaction Tax is £145,000, while in Wales the starting threshold for Land Transaction Tax is £225,000.
Higher SDLT rates apply to buyers of second and additional properties in all regions of the UK. The above rates apply to purchases of a main residence.
2 January 2025: Annual Property Values Up 4.7% In December
- Prices in December 0.7% higher than previous month
- Northern regions see higher growth compared to the south
- Average UK home worth £268,518 in December
The housing market ended 2024 on a ‘strong footing’ according to the latest data from mortgage lender Nationwide building society, writes Jo Thornhill.
Average property values rose by 0.7% in December, taking annual price inflation to 4.7%. This was up from an annual rise of 3.7% in November and puts the average value of a UK home at £268,518 – just shy of the all-time high of £273,751 recorded in the summer of 2022.
While all UK regions saw house price inflation in 2024, the data revealed a north-south divide in terms of the pace of price growth, as the chart below reveals:
Prices across the regions
Northern Ireland saw the steepest rise in property prices at 7.1% in the year to December. It takes the cost of the average home in the region to £197,696.
The North of England also performed strongly, posting annual inflation at 5.9%. Average prices now stand at £164,696. The North West region has recorded an annual rise of 5.5% taking average prices to £218,012.
The smallest annual rises were recorded in East Anglia at just 0.5%, taking prices to £272,152 on average.
London saw an annual rise of 2% with average prices at £525,535, while in the South East, prices rose by 2.3% putting average property values at £336,224.
Robert Gardner, Nationwide’s chief executive, commented: “Mortgage market activity and house prices proved surprisingly resilient in 2024 given the ongoing affordability challenges facing potential buyers.
“At the start of the year, house prices remained high relative to average earnings, which meant that the deposit hurdle remained high for prospective first-time buyers. This is a challenge that has been made worse by record rates of rental growth in recent years, which has hampered the ability of many in the private rented sector to save.
“As a result, it was encouraging that activity levels in the housing market increased over the course of 2024 with the number of mortgages approved for house purchase each month rising above pre-pandemic levels towards the end of the year.”
Looking ahead for the housing market in 2025 Gardner says the upcoming changes to stamp duty in April (for buyers in England and Northern Ireland) are likely to generate volatility as buyers bring forward house purchases to avoid the extra tax.
He said: “This will lead to a jump in transactions in the first three months of 2025 – especially in March – and a corresponding period of weakness in the following three to six months, as occurred in the wake of previous stamp duty changes. This will make it more difficult to discern the underlying strength of the market.”
Nathan Emerson, chief executive at the estate agent trade body Propertymark, commented: “With a degree of uncertainty still looming regarding borrowing rates and affordability, alongside rises to stamp duty for buyers from April 2025, many people are extremely keen to move sooner rather than later, defying the usual winter lull normally seen this time of year.
“However, once the dust has settled following the anticipated rush heading towards April, buyers and sellers may reap the rewards of a slower-paced market which may allow opportunities for greater negotiation on price from both buyers and sellers.”
Zoopla’s house price data for December also shows a resilient market with prices recorded at an average of £267,500 nationally – a 1.9% annual increase.
The property portal reported buyers and sellers had returned to the market in higher numbers in 2024, with pending (or ‘pipeline’) sales up 30% in December, compared to the same period in 2023.
Its figures reveal that 283,000 homes worth a total of £104 billion were progressing to a sale in 2025 at the end of December. This is the largest year end total in four years, as buyers press to complete sales before the April stamp duty tax rise.
Zoopla data shows house prices are increasing across all regions and countries of the UK, ranging from 0.7% in the South East of England, to 6.8% in Northern Ireland.
December 18 2024: Average Price Edges Towards £300,000
Average house prices increased by 3.4% to an average of £292,000 in the 12 months to October 2024, writes Jo Thornhill.
- Annual house price inflation at 3.4%
- Average home value at £292,000
- North East sees biggest increase among English regions
Land Registry figures published by the Office for National Statistics – which are based on house sales data – show the latest annual growth rose from 2.8% in the 12 months to September.
Annual house inflation has been gradually increasing since December last year, when it saw a fall of 2.7%.
Northern Ireland and Scotland have seen the largest annual price increases, at 6.2% in the year to the third quarter for Northern Ireland and 5.5% in Scotland. Average homes in these locations are now worth £190,553 and £197,451 respectively.
Prices are up 4% in the year to October in Wales, to stand at an average of £222,316. In England, the annual rise is 3%, taking the average home value to £308,781.
Regionally across England, values have risen most in the north. Annual house price inflation is running at 4.7% in the North East, for example, taking the average home in the area to £167,132.
In contrast, prices have risen at their lowest pace in London. Annual price inflation is recorded at just 0.2% in the capital, taking average property to a value of £519,579.
Nathan Emerson, chief executive at estate agent trade body Propertymark, said: “Looking at the entire year in view and against a backdrop of challenging economic conditions and political change, it is hugely encouraging to witness such a strong year of overall growth within the housing market.
“As we head across the winter months, we are expecting to see house transactions pick up beyond what is normally expected across England and Northern Ireland for this time of the year, as people look to complete on a sale before new stamp duty thresholds take effect next April.”
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, said: “With house values holding fairly steady and sellers more realistic about pricing, it could be the nudge buyers need to act in the new year, particularly if the Bank of England continues to cut interest rates.
“Transaction levels remain subdued compared to pre-pandemic norms, as high borrowing costs and stamp duty continue to weigh heavy on the market. We are noticing a growing divide between well-priced homes, which are selling without difficulty, and overpriced ones, which are stagnating on the market.
“However, a fresh new year and hopefully the return of sub-4% mortgage rates early in 2025 should restore buyer confidence and could boost transactions throughout the year.”
According to the latest data from Rightmove, new seller asking prices dropped by 1.7% (a fall of £6,395 in real terms) in December.
It takes the average asking price nationally to £360,197. Rightmove said the seasonal fall in prices was in line with the ‘usual decline’ seen in the run up to Christmas.
Overall, average asking prices will end the year 1.4% above the level of December 2023, says Rightmove. The website predicts that new seller asking prices will rise by 4% in 2025, with forecast mortgage rate drops set to further improve affordability and stimulate market activity.
Despite the festive lull, activity remains substantially stronger than in the same period a year ago, with the number of sales agreed up by 22%, and new buyer demand up by 13%.
Tim Bannister, Rightmove’s director of property science, said: “ New sellers in December have to work particularly hard to capture the attention of Xmas-party and festivity-distracted buyers, and the 1.7% average monthly fall is a fitting gift for those who are still buying homes rather than presents.
“Despite this monthly drop, prices have risen by 1.4% compared with this time in 2023, broadly in line with our prediction of a 1% rise in prices this year. We are now looking ahead to the traditional Boxing Day bounce in home-mover activity, which has increasingly become a key date in the housing market calendar.
“If this year is anything like recent years, those early birds who get their search started the day after the festivities are likely to be rewarded with plenty of fresh property to consider.”
6 December 2024: Typical Home Now Worth Just Shy Of £300,000
- Average prices up 1.3% in November
- Fifth consecutive month of price rises
- Annual property price inflation at 4.8%
- Typical home now worth £298,083
Property prices spiked by an average of 1.3% in November, according to mortgage lender Halifax, to reach a record high national average of £298,083.
The data shows that house prices rose by 4.8% in the year to November compared to a rise of 4% in the 12 months to October.
All nations and regions of the UK saw property price rises in the past year, with Northern Ireland seeing the strongest price growth of any nation or region, at 6.8% in the year to November. Properties there now cost an average of £203,131.
House prices in Wales also recorded strong growth, up by 4.1% year on year, to an average of £225,084. Scotland saw a more modest annual rise of 2.8%, taking the average home value to £208,957.
In England house prices saw the biggest jump in values in the North West, up by 5.9% year on year. The average home in the region stands at £237,045. The West Midlands has also seen strong growth, at 5.5% annually, to take the average price to £257,982.
London retains the top spot for the highest average house price nationally, at £545,439. House prices in the capital are 3.5% higher than a year ago.
Amanda Bryden, head of mortgages at Halifax, said: “House prices rose for the fifth month in a row in November, up by 1.3% in the month – the biggest increase so far this year. This pushed the annual growth rate to its strongest level since November 2022.
“Latest figures continue to show improving levels of demand for mortgages, as an easing in mortgage rates boosts buyer confidence. However, despite these positive trends, many potential buyers and movers still face significant affordability challenges and buyer confidence may be tested against a changeable economic backdrop.
“As we move towards the end of the year and into 2025, positive employment figures and anticipated decreases in interest rates are expected to continue supporting demand. This should underpin further house price growth, albeit at a modest pace as borrowing costs remain above the average of a few years ago.”
Nigel Bishop at buying agency Recoco Property Search said: “There has been a general uplift in buyer demand in November which impacted on property values and enabled some sellers to achieve their asking price. In some parts of the country, however, homeowners are experiencing seller fatigue after failing to sell earlier this year and are more open to lowering their asking price.
“We therefore advise house hunters to conduct careful research of their chosen area’s property market as it could be very different from the national picture and give them the upper hand during price negotiations.”
Mark Harris of mortgage broker SPF Private Clients, said: “With the Bank of England suggesting there may be four rate cuts next year, this will bring further cheer to hard-pressed borrowers who are struggling with affordability.
“The direction of travel of mortgage rates is downwards although it’s a slow, measured process. Borrowers looking for a mortgage should plan ahead as much as possible.”
2 December 2024: Property Values 1% Below All-Time Peak
- House prices increase by 1.2% in November
- Annual inflation running at 3.7%
- Typical home worth £268,144
Property prices rebounded in November with monthly prices rising by 1.2% compared to 0.1% in October, writes Jo Thornhill.
It takes annual house price inflation to 3.7% – up from 2.4% on the previous month and the fastest rate of increase seen since November 2022, according to mortgage lender Nationwide.
The average house price, now at £268,144, is just 1% below the all-time price peak the building society recorded in the summer of 2022.
Robert Gardner, Nationwide’s chief economist, said that the acceleration in house price growth is ‘surprising’, since affordability remains stretched and house prices are still high compared to average incomes, while interest rates are much higher than pre-Covid levels.
He commented: “Housing market activity has remained relatively resilient in recent months, with the number of mortgage approvals approaching the levels seen pre-pandemic, despite the higher interest rate environment.
“Providing the economy continues to recover steadily, the underlying pace of housing market activity is likely to continue to strengthen gradually as affordability constraints ease through a combination of modestly lower interest rates and earnings outpacing house price growth.”
Mr Gardner said that the boost in price growth is unlikely to have been driven by upcoming stamp duty changes, announced in the recent Budget, since the majority of mortgage applications on which Nationwide’s data are based, are from before that date (30 October).
Many home buyers will pay higher stamp duty from April 2025 in England and Northern Ireland, as the 2% band on home purchases of between £125,000 and up to £250,000 is reinstated. Currently, there is no stamp duty payable on purchases between these amounts.
Stamp duty relief for first-time buyers (FTB) will also be scaled back. Currently no stamp duty is paid the first £425,000 on homes worth up to £625,000 for FTBs. From 1 April, this nil-rate band will fall to £300,000.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “The Budget blip was a wrinkle rather than a rift. The housing market has shaken it off, bouncing back to its fastest annual growth since November 2022.”
In separate research, Zoopla, the property portal, has reported house price inflation at 1.5% in the year to October.
Among regional cities, Belfast has seen the biggest jump in house prices at 6.3% in the 12 months to October. The average home is valued at £180,300.
Manchester and Glasgow take second and third place with annual price inflation running at 3.1% and 2.8% respectively. Average prices in Manchester and Glasgow stand at £229,500 and £153,000 respectively.
At the other end of the scale, Bournemouth, Portsmouth and Aberdeen have seen the lowest price inflation of the cities measured by Zoopla. Prices have risen by a marginal 0.8% in Bournemouth to £327,900 on average, and by just 0.1% in Portsmouth to £278,400. In Aberdeen prices have fallen annually by 0.6% to an average value of £136,500.
Prices in London have risen by just 1.1% in the year to October, although property values in the capital remain the highest of any UK city or region at £534,000 on average.
Zoopla is projecting national house prices to rise by an average of 2.5% during 2025. Although it said that changes to stamp duty in April next year are likely to have a dampening effect on the property market as buyers facing higher purchase costs will want to see this discounted from the price.
Elsewhere, Halifax’s annual affordability index has found that buying a home has become slightly more affordable, with the average house value to income ratio falling to 6.55, down from 6.62 at this time in 2023. The peak was recorded at 7.24 in the summer of 2022.
Average pay has increased by 5% over the past 12 months, compared to house price inflation at 3.2%, which has helped reduce the overall house price to earnings ratio. Mortgage costs as a proportion of income have also fallen, from 33% last year to 29%.
20 November 2024: Annual Growth At 2.9% In September
- Average home value rises 2.9% over the year
- Prices fall by 0.3% in September
- Average UK house price at £292,000
Average property prices across the UK fell by a nominal 0.3% in September, but are up by 2.9% year-on-year, according to the latest data from the Office for National Statistics and the Land Registry, writes Jo Thornhill.
This annual increase is up from the 2.7% price growth recorded for the year to August.
Significant regional differences remain in house price performance. Northern Ireland has seen the biggest annual increase in property prices with a 6.2% rise in the year to the end of quarter three (July to September). The average property there is worth £190,553.
In contrast, prices have performed the worst in London, where they have fallen, on average, by 0.5%, in the year to September. Average prices in the capital remain the most expensive of any UK region at £525,586.
While prices have surged by 5.7% annually in Scotland to reach an average £198,046, prices have risen only a nominal 0.4%. over the same period in Wales. The average property in Wales is now worth £216,750.
In England, northern regions have seen the biggest house price inflation over the year to September, at 6.5% in the North East and 4.8% in the North West. Average homes are now worth £170,644 and £225,977 respectively.
After London, the English regions with the lowest annual house price growth are the South West, where prices have risen just 1% over the year to stand at £319.015, and the East of England, where they’ve gone up by 1.2% to £342,470.
An increase in the monthly rate of inflation to 2.3% (published by the ONS today, 20 November) could mean that fixed mortgage rates may not fall any lower in the short term, as had been previously hoped. This is likely to have a dampening effect on house prices.
Holly Tomlinson, a financial planner at Quilter, said: “The slight dip [month-on-month] reflects the usual seasonal slowdown, but also hints at growing caution among buyers and sellers amid ongoing economic and policy uncertainty.
“Regionally, the picture remains varied. The North East continues to lead the way, driven by affordability and demand, while London lags behind… underscoring the challenges in high-cost areas.
“Affordability remains a key theme throughout the market, but first-time buyers face a particularly challenging landscape, with prices for starter homes rising annually but falling slightly month-on-month, reflecting squeezed budgets and elevated mortgage costs.
“With mortgage rates having gone up in the last few months despite a cut to the Bank of England Bank Rate, first-time buyers continue to have the rug pulled from beneath them.”
Mark Harris at mortgage broker SPF Private Clients said: “With inflation rising to 2.3%, the Bank of England could well be cautious at next month’s meeting and press the hold button rather than cut the Bank Rate further.
“Further rate reductions are more likely next year than this one, with swap rates rising on the back of today’s inflation figures. However, while inflation rose more than expected, it’s still only just above the 2% target and fluctuations are not unexpected.
“Mortgage rates have risen in recent weeks on the back of higher swap rates, with no sub-4% fixed rates now on offer. That said, fixes are pegged only just above this level so borrowers should not panic.”
Nathan Emerson, chief executive at estate agent trade body Propertymark, said: “As the economy continues to stabilise, data provided by our member agents tells us that the housing market has gathered pace throughout the year.
“We have witnessed the overall number of properties coming to the market each month edge upwards to create a two-year high, and as confidence and affordability have returned, it is positive to see homeowners witness enhanced levels of equity within their properties.
“However, with the recent Budget announcing stamp duty increases for buyers in England and Northern Ireland from April, we anticipate that the speed of the market will likely continue at pace, as buyers look to potentially complete before the proposed changes take effect and save thousands in the process.”
18 November 2024: Rightmove Says Prices Will Rise 4% In 2025
- Average asking prices drop 1.4% in November
- Prices up 1.2% year on year
- Activity remains buoyant – sales and buyer demand up
- Average asking price is £366,592
The average asking price of new properties coming onto the market has dropped by 1.4% in November, according to the latest data from property portal Rightmove, writes Jo Thornhill.
It is usual for asking prices to fall back a little at this time of year, when the housing market tends to be quieter. But this month’s fall was bigger than the seasonal average at 0.8%, according to Rightmove.
Annual prices however, have increased by a nominal 1.2%, with the average UK asking price now standing at £366,592.
The number of sales being agreed is also up by more than a quarter (26%) compared with the same period in 2023 while the number of new sellers is 6% higher.
Rightmove’s real-time data also shows some early signs of an uptick in buyer demand following November’s interest rate cut by the Bank of England with demand 23% higher than the same time last year. However, estate agents now broadly predict that, as usual, activity will tail off towards Christmas.
Rightmove’s forecast for 2025 is for average asking prices to rise by 4%. This is the highest prediction since 2021. It is expected that lower mortgage rates should release some of the pent-up demand for house buying and selling, which in turn could put modest upward pressure on asking prices.
Regionally, prices are up year on year in all areas except for the South West and South East of England, where they have fallen by 0.5% and 0.1% respectively. The average asking price in the South West stands at £374,909, and at £471,477 in the South East.
Prices have risen by the most in the past year in the North East of England. Average asking prices have now hit £189,694 – a 4.3% annual rise.
In Scotland prices are up 4% year on year with average asking prices at £193,179, while in Wales annual prices have risen by 2.3% to reach £260,096.
Asking prices in the capital stood at £683,316 in November – a 1.5% uplift on last year.
Tim Bannister, Rightmove’s director of property science, commented: “There’s been a lot of news to digest for home-movers over the last few weeks and it appears that the market may still be chewing it over.
“We had been seeing a drop-off in buyer demand, both in the lead-up to the Autumn Budget and in its immediate aftermath, as it was confirmed that there will be an increase to stamp duty charges for most home-movers and second-home buyers, and some first-time buyers.”
“However, a second Bank Rate cut and a boost of optimism regarding 2025 appear to have reversed this trend at least temporarily. Zooming out of these short-term trends, the big picture of market activity remains positive when compared to the quieter market at this time last year.
“This sets us up for what we predict will be a stronger 2025 in both prices and number of homes sold, particularly if mortgage rates fall by enough to significantly improve affordability for more of the mass-market.”
Nathan Emerson, chief executive at estate agent trade body Propertymark said: “With many buyers (in England and Northern Ireland) looking to move quickly before the stamp duty rises in April. We could see more people willing to accept heavier negotiations than normal, which could result in a small dip in the average house price.”
7 November 2024: Values Surpass Previous Peak Of June 2022
- Average house prices rise 0.2% in October
- Annual price inflation at 3.9%
- Typical home now worth £293,999
House prices increased by 0.2% in October, according to the latest data from Halifax, the UK’s biggest mortgage provider, writes Jo Thornhill.
It is the fourth consecutive monthly increase and takes average property values to a record high of £293,999, meaning average property prices have surpassed their previous peak, set in June 2022, when values reached £293,507.
On an annual basis house values are up by 3.9%. This is down slightly from the 4.6% annual rise recorded in September.
The news comes as the Bank of England is set to decide on interest rates at midday today (7 November). Experts are predicting the benchmark Bank Rate will be cut from 5% to 4.75%, which would likely prompt lenders to reduce the cost of many of their mortgage offers.
Amanda Bryden, head of mortgages at Halifax, said: “That house prices have reached these heights again in the current economic climate may come as a surprise to many, but perhaps more noteworthy is that they didn’t fall very far in the first place.
“Despite the headwind of higher interest rates, house prices have mostly levelled off over the past two and a half years, recording a 0.2% increase overall. That’s a significant slowdown compared to the 21% rise we saw in the equivalent period from January 2020 to the summer of 2022.”
Regionally, Northern Ireland continues to record the strongest property price growth of any nation or region in the UK, rising by 10.2% on an annual basis in October. The average price of a property in Northern Ireland is now £204,242.
House prices in Wales also recorded strong growth, up 5.6%, compared to the previous year, with properties now costing an average of £225,543.
In Scotland property prices are 1.9% higher than a year ago, with the average home now worth £206,480. This is the lowest recorded annual rise of any UK region or country.
The North West is the region of England with the strongest annual house price growth, up by 5.9%. Average properties now stand at £235,587. London continues to have the most expensive property prices in the UK, now averaging £543,308, 3.5% higher than last year.
Mark Harris of mortgage broker SPF Private Clients, said: “The housing market has been significantly buoyed by lower mortgage rates, leading to more interest from prospective buyers and increased activity.
“The Bank of England is still expected to cut interest rates later today which would help boost confidence and affordability, particularly as this trend is expected to continue, albeit at a slower pace than previously thought, into the new year.”
1 November 2024: Stamp Duty Nil-Rate Thresholds To Fall In April
- Annual house price inflation at 2.4% in October
- Monthly increase in house prices at 0.1%
- Average UK property price is £265,738
According to the latest House Price Index from Nationwide building society, the price of a typical UK home increased by 2.4% year on year in October, down from 3.2% in September, writes Kevin Pratt.
House prices rose by 0.1% month-on-month in October.
Commenting on the figures, Robert Gardner, chief economist at the society, said: “Housing market activity has remained relatively resilient in recent months, with the number of mortgage approvals approaching the levels seen pre-pandemic, despite the significantly higher interest rate environment.
“Solid labour market conditions, with low levels of unemployment and strong income gains, even after taking account of inflation, have helped underpin a steady rise in activity and house prices since the start of the year.”
Nationwide is expecting the economy to continue to recover steadily, which it says will allow housing market activity to strengthen gradually as properties become more affordable thanks to a combination of lower interest rates and earnings outpacing house price growth.
The housing market is absorbing the fall-out from this week’s Budget, in which the Chancellor, Rachel Reeves MP, confirmed the temporary increase in nil rate stamp duty thresholds in England & Northern Ireland would expire on 31 March 2025.
For first-time buyers purchasing a property valued under £500,000, the nil rate threshold will fall to from £425,000 to £300,000. For other residential buyers, it will fall from £250,000 to £125,000.
Gardner said: “The main impact of the stamp duty changes is likely to be on the timing of property transactions, as purchasers aim to ensure their house purchases complete before the tax change takes effect.
“This will lead to a jump in transactions in the first three months of 2025, especially March, and a corresponding period of weakness in the following three to six months, as occurred in the wake of previous stamp duty changes.”
Nationwide’s analysis for the year to June 2024 suggests that the stamp duty change will affect around one in five first-time buyers, with the impact varying across the country because of the difference in house prices.
It says the most pronounced effects are likely to be in the South East of England, where 40% of first-time buyers paid between £300,000 and £425,000 for their homes.
The areas least affected are likely to be Yorkshire & The Humber, the North of England and Northern Ireland, where less than 10% of first-time buyers paid between £300,000 and £425,000 for their homes.
28 October 2024: Property Sales Return To Peak Pandemic Levels
- Annual house price inflation at 1%
- Sales numbers at highest level since 2020
- First-time buyers most active buyer group
House prices are 1% higher than this time last year, according to September data from online property portal Zoopla, with sales activity at its highest since 2020, writes Jo Thornhill.
The number of ‘sales agreed’ is 30% higher than a year ago, with first-time buyers representing 36% of all sales, making them the largest buyer group in 2024 so far.
Zoopla says the average property price across the UK is now £267,500. It says 2024 is turning into a ‘bumper year’ for housing sales, not least because of lower mortgage costs.
Competition among lenders has seen average borrowing rates reach their lowest level in two years, while rising incomes are helping to support a higher level of sales agreed.
The portal says sales volumes are at their highest since the boom in the wake of pandemic restrictions being lifted in late 2020.
Prices are up by just 1% over the last 12 months to September 2024, compared to a moderate fall of 0.9% a year ago. Price inflation is being held back due to the relatively larger supply of properties for sale, while buying power is being kept in check by affordability pressures, says Zoopla.
Property price inflation continues to rise fastest in areas with more affordable house values, including the North East of England, where prices are up 2% annually and the average home is worth £143,400.
Prices have also risen 2% year on year in Yorkshire and Humberside, to an average value of £188,600, while prices are up by 2.3% annually in the North West to £198,100.
In Scotland average annual price inflation stands at 2.4% and a typical home is now worth £165,300, and in Northern Ireland prices are up 5.6% year on year to an average value of £176,300, according to Zoopla.
House prices are posting small falls in the southern regions of England. Average prices are down by 0.3% in Eastern England to £337,100 and prices are down by 0.1% in the South East to £388,000.
Prices are up a modest 0.6% in London, where the average home is now worth £537,400.
Responding to the data, Nathan Emerson, chief executive at estate agent trade body Propertymark, said: “We have seen an encouraging transformation across the year in terms of a resilient trend of house price growth. Affordability and overall confidence in the sector have also seen a boost throughout the year so far.
“Considering the government has an ambitious aim to deliver growth following what has been a turbulent few years, we hope that this week’s Autumn Budget will be used as a springboard to improve housing supply. Propertymark has long argued that stamp duty reform is one way to do that, especially for those wishing to downsize.
“When the Bank of England’s Monetary Policy Committee (MPC) meets on Thursday next week (7 November), we hope to see further progression on potentially cutting interest rates as this will continue to improve the overall health of the economy.”
Matt Thompson, head of sales at estate agent Chestertons, said: “The property market has been extremely active this year and we currently have 17% more properties under offer than in 2020. Pent-up demand, improved mortgage deals and people’s desire to find a property ahead of the Autumn Budget have been key motivators for house hunters to finalise their search.”
21 October 2024: Sales Agreed Surge 29% After Weak 2023
- Average asking price up 0.3% in October
- Annual rate of price increases at 1%
- Agreed sales up 29% year-on-year
Average new seller asking prices increased by just 0.3% in October (£1,199 in real terms), according to online property website Rightmove, writes Jo Thornhill.
This is lower than the long-term seasonal average rise of 1.3% for this time of year, and means average asking prices are only 1% higher than in October 2023. The average property asking price across the country is at £371,958.
But while prices are largely flat, market activity remains strong, according to Rightmove data. The number of sales being agreed is up by 29% year-on-year, a strong rebound from the weaker market in 2023.
Underlying buyer demand remains strong, with the number of people contacting agents about homes for sale up by 17% compared with this time last year, despite uncertainty caused by what might be included in the upcoming Autumn Budget on 30 October.
The number of properties for sale is 12% higher than a year ago and is at the highest level per estate agent since 2014. But this means competition between sellers is fierce, as they look to find price-sensitive buyers.
Regionally, asking prices rose the most in London and Scotland in October. Prices were up 1.9% in Scotland to an average of £197,953, and up by 1.8% in the capital to £694,906.
On an annual basis, prices have increased the most in Scotland and the North East of England, up 5.6% and 4.9% respectively. The average asking price in the North East is now £192,742.
The South West and South East regions of England are the only areas to have seen a fall in asking prices over the past year at a drop of 0.2% and 0.6% respectively. The average asking price in the South West is now £384,237, while in the South East it stands at £483,780.
Overall, Rightmove says the market outlook is positive, but affordability pressures remain, and some buyers may be waiting for Budget clarity and cheaper mortgage rates before acting.
Tim Bannister, the portal’s director of property science, said: “This month’s subdued price growth comes as buyer choice soars to a level not seen since 2014. With the ball in the buyer’s court and the pick of a big crop to choose from, sellers need to be pricing competitively to find a buyer.
“Some sellers appear to be acting on this caution, contributing to limited price growth and better buyer affordability. This is helping to keep the number of sales being agreed consistently and strongly ahead of the [normally] quieter market of this time last year.
“Once we have more certainty about the contents of the Budget, hopefully followed by speedy second and third Bank Rate cuts, we could see another surge in market optimism like we had in the Summer. Affordability is still the biggest barrier facing many movers, with mortgage rates still high, so if the expected two cuts come to fruition it could be the boost that many buyers-in-waiting need.”
Nathan Emerson, chief executive of estate agents trade body Propertymark, said: “ Many serious buyers seem to be in the driving seat when it comes to negotiating on their next home move due to the vast choice of properties on the market. With the Bank of England’s next announcement on interest rates looming, some buyers will be cautious with their current budgets or will be waiting in the wings to see what its decision will mean for the market before moving.”
Myles Moloney, sales manager at estate agent Chase Buchanan, said: “At the beginning of October we saw continued buyer confidence which was boosted by favourable mortgage rates and a greater number of properties being put up for sale.
“As we are nearing the Autumn Budget, however, house hunters and sellers have grown more cautious. We predict market activity to pick-up after the Budget, once buyers and sellers feel that a more defined picture of the political and economic environment has been established.”
16 October 2024: Figures Point To ‘Modestly Positive Picture’
- Average prices rise 2.8% in year to August
- Sixth consecutive month of annual increases
- Typical property now worth £293,000
Average house prices, based on data from property sales recorded by the Land Registry, rose by 1.5% in August, taking annual price inflation to 2.8%, writes Jo Thornhill.
It is the sixth consecutive month of annual increases recorded by the Office for National Statistics (ONS). The average UK house price stood at £293,000 in August, £8,000 higher than 12 months ago.
With inflation dropping to 1.7% in September, the Bank of England now looks more likely to cut its benchmark Bank Rate, currently at 5% following a cut from 5.25% on 1 August, when it next meets on 7 November.
This would provide a further boost to the property market, although increased activity could fuel house price inflation, which is bad news for first-time buyers.
Average property values increased by 2.3% annually in England to £309,572, according to the ONS. Wales has seen a 3.5% annual rise to £222,925, while prices are up by 5.4% in Scotland to £199,971.
The average house price increased in the year to the second quarter of 2024 (April to June) to £185,025 in Northern Ireland, an annual rise of 6.4%.
The latest residential property market survey published by RICS (The Royal Institution of Chartered Surveyors) shows an increase in buyer enquiries and agreed sales in August.
It says this continues to point to a ‘modestly positive picture’ for the market and house prices. The exceptions are Scotland and Northern Ireland, where house prices are rising more quickly.
Jeremy Leaf, north London estate agent and former RICS residential chairman, said: “This most comprehensive of all house-price surveys, as it includes cash and mortgage transactions, demonstrates once again considerable market strength despite reflecting activity over the past three months at a time of economic and political turbulence.
“Today’s larger-than-expected fall in inflation, added to yesterday’s wage growth, will raise expectations of further cuts in mortgage costs and be a welcome shot in the arm to buyer confidence.”
Tomer Aboody, director of specialist lender MT Finance, said: “The housing market continues to go from strength to strength with prices edging upwards as buyer and seller confidence grows. However, some of this recovery is down to the comparison with the static, slow market of last year, where prices and transactions were down.
“We are now seeing the fruits of a better economy and lower rates, with mortgages much more affordable than this time last year. Lower inflation should also persuade the Bank of England to take action and reduce rates further.”
7 October 2024: Values Rising At Highest Pace In Two Years
- Annual house price inflation at 4.7%
- Average prices up 0.3% in September
- Mortgages agreed up 40% year on year
- Typical home worth £293,399
The average property increased in value by 0.3% in September, matching the rise seen in August, according to data from Halifax, the UK’s biggest mortgage lender, writes Jo Thornhill.
Annual house price inflation is running at 4.7%, the highest level seen since November 2022. A typical property now costs £293,399, up from £292,540 in August, following three consecutive months of price gains.
Northern Ireland continues to have the strongest annual house price growth in the UK at 9.7% in the year to September. The average property value here is now at £203,593.
Prices rose by 4.4% in Wales to an average of £224,119, and by 2.1% in Scotland to £205,718.
In England, the best performing regions are the North West, which recorded annual price inflation of 5.1% (the average home in the region is now worth £234,355) and Yorkshire and Humber, which has seen price rises at 4.3%, on average (a typical home here is now worth £210,116).
The lowest annual price increases in England were in Eastern England, at 2.3% in the year to September. The average house price in the region is £333,042.
In London, the average house price stands at £539,238, after annual price inflation was recorded at 2.6% in the year to September. But Halifax says this is still some way below the capital’s peak property price of £552,592 set in August 2022.
The average amount paid for a property by first-time buyers has increased by 4.2% over the past year. This is an extra £9,409 in cash terms and brings the typical first-time buyer property price up to £232,769, its highest level since May 2024.
However, that’s still about £1,000 less than the average amount paid by a first-time buyer two years ago (£233,760), a fall of 0.4%.
Amanda Bryden, head of mortgages at Halifax, said: “It’s essential to view these recent gains in context. While the typical property value has risen by around £13,000 over the past year, this increase is largely a recovery of the ground lost over the previous 12 months. Looking back two years, prices have increased by just 0.4% (£1,202).
“Market conditions have steadily improved over the summer and into early autumn. Mortgage affordability has been easing thanks to strong wage growth and falling interest rates. This has boosted confidence among potential buyers, with the number of mortgages agreed up over 40% in the last year and now at their highest level since July 2022.
“While improved mortgage affordability should continue to support buyer activity, boosted by expected further cuts to interest rates, housing costs remain a challenge for many. We expect property price growth over the rest of this year and into next to remain modest.”
Mark Harris of mortgage broker SPF Private Clients said: “Lenders continue to reduce their mortgage rates, which is encouraging buyers to make their move. Two-year fixes are now available from 3.84% while the cheapest five-year fix is pegged at 3.68%, which will prove to be more palatable for borrowers.
“This ongoing rate war among lenders is great news for borrowers as there are some really compelling deals being launched, which will go some way to helping affordability.”
Matt Thompson at estate agent Chestertons said: “Lower interest rates and sub-4% mortgage products saw more house-hunters start their property search in September. The uplift in buyer activity, and looming changes to capital gains tax (CGT) in the upcoming Budget, also motivated sellers to put their property up for sale.
“We expect this level of market activity to continue and could see an additional boost in buyer motivation if the Bank of England decides to cut interest rates in November.”
3 October 2024: Lower Mortgage Rates Boost Sales By 25%
- Annual price inflation at 0.7%
- Demand up 26% as sales agreed rise 25%
- Average property price £267,100
Stable house price growth (an annual rise of 0.7% in the year to August) and the lowest mortgage rates in 15 months have boosted confidence among buyers and sellers, according to the latest house price data from Zoopla, writes Jo Thornhill.
The property portal saw a 26% increase in buyer demand in August compared to the same month in 2023.
The number of properties for sale is up 12%, with sales agreed up by 25%, compared to the same time last year. This rises to an increase of more than 25% for sales agreed in the East Midlands (32%) and in the North East of England (30%).
Zoopla says higher buy-to-let mortgage costs and speculation about tax increases on landlords in the Budget (due on 30 October) have boosted the supply of properties for sale, with landlord investors and second home owners looking to offload their properties.
The firm says 32% of homes for sale on its site are ‘chain-free’, which suggests they may be being sold by landlords.
Regionally, house prices are up over the year to August in all areas, except for the South West of England (down 0.3% to £315,400), the South East of England (down 0.2% to £338,000), and the East of England region (down 0.9% to £337,100).
The North West of England has seen the biggest annual growth in prices of all English regions at 2.1%, and the average home is now worth £198,100.
Annual house price inflation is highest across the UK in Northern Ireland, at 5.7%. The average home in the country is now worth £176,300.
Prices in Scotland are up 2.2% in the year to August, and stand at £165,300, on average, while in Wales prices have risen by 1.3% to £205,800.
The average home across the UK is now worth £267,100.
Richard Donnell at Zoopla said: “Lower mortgage rates are delivering a much needed confidence boost to homeowners, many of whom have sat on the sidelines over the last two years. Market activity is up across the board and expectations of lower borrowing costs will continue to bring buyers and sellers into the market.
“Speculation over possible tax changes in the Budget and the impact of previous tax changes are supporting the expansion in homes for sale. More supply delivers much greater choice for buyers and will keep house price inflation in check into 2025.“
Nathan Emerson at estate agent trade body Propertymark said: “We are starting to see early signs of lenders having the confidence to shift up the landscape by offering sub-4% mortgage deals, which points towards future confidence within the economy.”
Nigel Bishop of property agent Recoco Property Search said: “Second homeowners and buy-to-let investors are facing drastic changes as some local authorities have or are going to start charging double council tax for properties that are left empty for more than a year. We are seeing more second homeowners contemplating if maintaining their holiday home remains a sound financial investment.
“If a substantial number of second homes is being put up for sale, we could see the property market in areas such as Cornwall become increasingly attractive to house hunters who are seeking a permanent residence but are currently priced out of the market.
“That being said, a lot of properties are being offered at considerably high asking prices and sellers will need to adjust their expectations.”
30 September 2024: Demand Improves As Market Settles
- Annual house price growth at 3.2%
- September figure 0.7% up on last month
- Price increases in Northern Ireland running at 8.6% (in year to Q3)
- Average home worth £266,094
House prices are rising at their fastest pace since November 2022, according to the latest data from mutual mortgage lender Nationwide building society, writes Jo Thornhill.
It recorded a 3.2% annual price rise across the country in September, up from the 2.4% the lender posted in August. This compares to an annual rise of 4.4% in November 2022.
Following a 0.7% monthly increase in September, average house prices are now only 2% below the record highs recorded in the summer of 2022.
Most regions saw a pick up in the third quarter of the year (July to September). Northern Ireland saw the biggest jump in prices, recording an 8.6% increase in the year to the end of the third quarter. The average house price in the country is now at £197,196.
Scotland also saw significant annual price increases at 4.3% taking the average price to £184,471, while prices in Wales recorded an annual rise of 2.5% to £207,113.
Prices in England are up 1.9% year on year, with the national average now standing at £304.049. London is the best performing region in the south of England, with price rises of 2% in the year to September. The average property in the capital is now worth £524,685.
East Anglia was the only UK region to record a fall in annual prices, showing a decline of 0.8% compared to last September. The average home in the region is now at £270,906.
Robert Gardner, chief economist at Nationwide said: “Income growth has continued to outstrip house price growth in recent months, while borrowing costs have edged lower amid expectations that the Bank of England will continue to lower interest rates in the coming quarters.
“These trends have helped to improve affordability for prospective buyers and underpinned a modest increase in activity and house prices, though both remain subdued by historic standards.”
Estate agent and former RICS chairman Jeremy Leaf said: “The market has changed and demand is improving which has coincided with lower mortgage rates and a more settled picture for inflation and politics.
“This shift has resulted in more appraisals, listings, offers and firming pricing. But with the choice of properties and mortgages rising, a fear of missing out is also prevailing. Uncertainty remains an obstacle, particularly at the higher end, probably at least until after the Budget at the end of October.”
Sarah Coles, head of personal finance, Hargreaves Lansdown added: “While it was great news for sellers who need a buoyant property market to shift their home, it’s less positive news for first-time buyers, who can see the property of their dreams move even further out of reach”.
The latest mortgage data from the Bank of England’s Money and Credit report has also found that net mortgage approvals for house purchase increased to a two-year high, rising from 62,500 in July to 64,900 in August. It is the highest level since August 2022, when approvals for purchase were recorded at 72,000.
Approvals for remortgaging have also increased from 25,200 in July to 27,200 in August.
Overall, individuals borrowed a net £2.9 billion in mortgage debt in August, up slightly from £2.8 billion in July, reflecting continued demand for housing.
Rosie Hooper, chartered financial planner at Quilter Cheviot, said: “The Bank of England’s statistics for August, combined with this morning’s house price growth figures from Nationwide, paint a picture of a housing market that is regaining momentum amid easing borrowing costs and renewed buyer activity.
“The mortgage approval rise indicates that prospective buyers are taking advantage of improving market conditions and lower mortgage rates and locking in more favourable deals.”
18 September 2024: Average House Prices Up 2.2%
- Fifth consecutive month of annual increases
- Average home now worth £290,000
Annual house price inflation is running at 2.2% in the year to July, according to the latest data released by the Office for National Statistics (ONS), writes Jo Thornhill.
It’s a slight fall from the 2.7% annual increase recorded in the year to June. But it marked the fifth consecutive month of price rises, indicating continued stability in the market. Previously there had been eight consecutive months of annual price falls.
The monthly increase to house prices was a nominal 0.6% and takes the value of the average home across the country to £290,000.
The ONS index, which uses Land Registry data on sold properties, shows variations in the countries and regions.
The average house price in England is up by 1.6% annually and the average value of a home is now at £305,879.
In Wales prices rose 2% in the year to July to stand at an average value of £218,184, while prices in Scotland are up by 6% to £199,398 over the same time period.
Average prices increased in Northern Ireland by 6.4% in the year to the end of June 2024 (end of the second quarter of the year). It is the biggest annual change of any region and takes the value of a typical home in the country to £185,025.
Mark Harris, chief executive at mortgage broker SPF Private Clients, said: “With inflation sticking at 2.2% and expected to edge up in the autumn, it’s unlikely this will trigger a further rate cut from the Bank of England this month, although the markets still expect at least one further rate reduction before the end of the year.
“The good news for borrowers is that mortgage rates continue to soften, with Santander introducing a sub-4% two-year fix on the back of the lowest two-year Swap rates in two years. There are also plenty of five-year fixes at sub-4% for those looking for certainty over a longer period.
“While rock-bottom rates have long gone, these reductions are giving borrowers some comfort after a prolonged period of rising rates. Competition between lenders is likely to mean further gentle reductions in mortgage rates as they vie for new business.”
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, said that most properties are getting a good number of viewings but realistic pricing remains paramount.
She said: “This isn’t a market where buyers are coming in with big offers, there are some exceptions to this but most people want to see properties that are reasonably priced and not waste their time. In a rising market, you can ask a high price and know applicants will view and offer but a flat market is very different.
“It looks unlikely that the Bank of England will cut rates this month but a November rate cut, while too late to impact the housing market this year, will help kickstart the 2025 market.”
16 September 2024: Buyers Return To Market
- Average asking prices up 0.8% in September
- Annual price growth running at 1.2%
- Number of sales agreed up 27%
The average asking price of property coming on to the market is up 0.8% in September compared to August, according to the UK’s largest property portal, Rightmove. With annual inflation at 1.2%, it takes the average seller price across all property types to £370,759, writes Jo Thornhill.
Rightmove says it is usual to see a monthly rise in prices in September, but this year’s 0.8% increase is double the long-term average rise, with stable prices supported by increased market activity.
Buyers and movers are likely to have been buoyed by the August cut to interest rates by the Bank of England to 5% from 5.25%, with the potential for further cuts at the next decision meeting this Thursday (19 September), or in November.
The number of sales being agreed is up by 27% year on year, a strong rebound compared with last year’s more subdued market. Rightmove says this is most likely due to a release of pent-up buyer demand.
Homeowners also appear more confident to come to market, with the number of new sellers listing homes for sale up by 14% compared to this time last year.
The average number of available properties for sale per estate agent is 33 – marking its highest level since 2014. This has come from a 14% increase in new properties coming to the market for sale compared with last year. But homes ae still in relatively limited supply, says Rightmove, as this figure is only up by 3% when compared with the more usual pre-pandemic 2019 market.
Despite some encouraging signs from the market, estate agents report buyers are still cautious and particularly price-sensitive. The average property seller is taking 60 days to find a buyer – three days longer than at this time last year despite better market conditions and lower mortgage rates.
Tim Bannister, Rightmove’s director of property science, commented: “The Autumn action has started early with a strong rebound in activity from both buyers and sellers compared to the subdued market at this time last year, continuing the momentum from the better-than-expected summer market.
“The certainty of a new government followed by the first Bank Rate cut in four years invigorated the market, opening a window of opportunity for movers to act. Some of this will be pent-up demand from those who had to hit the pause button until now.”
He added: “However, windows of opportunity tend to need a momentum of good news to stay open, and there are still uncertainties ahead which could cause some of the current market activity to ease.”
On a regional basis, average asking prices are up in September, both monthly and year-on-year, in all areas with two exceptions; the East of England, where prices fell 0.3% and are flat (0%) annually, and in the South West of England where prices are down 0.8% (although they are up 1% year on year).
The average asking price in the East of England is now at £418,110, and at £387,389 in the South West.
Average asking prices increased the most in September in Scotland and the West Midlands, both up by 1.1%. The average home for sale is at £194,180 in Scotland and at £293,796 in the West Midlands.
Annually, asking prices have risen the most in the North East of England, according to Rightmove, up by 5% year on year to stand at £193,706.
Nathan Emerson, chief executive at estate agent trade body Propertymark, said: “It is positive news to see further uplift across the housing market now affordability has more confidently swung in the direction of consumers.
“We are keen to see further dips in the Bank of England Bank Rate as conditions permit, but at this point it is important to consider what effect the Budget at the end of next month may have on the housing market and if today’s figures reflect a keenness by consumers to complete on a property before any potential changes to the current tax structure might be announced.”
Tony Gambrill, regional sales director at London-based estate agency Chestertons, said: “Due to pent-up demand from buyers, London’s property market was experiencing an unusually busy summer whereby sellers still had the upper hand during price negotiations.
“House hunters felt that market conditions had improved amid lower mortgage rates and were keen to finalise their search. This additional buyer confidence will result in demand remaining high well into the autumn.”
6 September 2024: Annual Price Growth Strongest Since 2022
- Average prices up 0.3% in August
- Annual increase running at 4.3%
- Typical property stands at £292,505
Annual house price inflation is at its highest level since November 2022, according to the latest data from mortgage lender Halifax, after values were recorded to be increasing at 4.3% in the year to August.
The monthly increase in average prices for August was 0.3%, down from the 0.9% rise recorded in July.
The average home across the UK is now worth £292,505.
Northern Ireland has the strongest property price growth of any region. Prices rose by 9.8% to reach £201,043 in the year to August, according to Halifax.
Wales also recorded strong growth, with prices up by 5.5% annually to £224,043.
Scotland has seen more modest growth in prices over the past year. The average home is now worth £205,144, which is 1.7% higher than a year ago.
The North West of England has seen the strongest price growth in the year to August of any English region. Prices are up 4% to an average of £232,917. While Eastern England had the weakest annual price growth at just 0.3%. Average prices stand at £330,511.
London has the most expensive property prices in the UK at an average of £536,056, which is an annual increase of 1.5%
Amanda Bryden, Halifax’s head of mortgages, said: “Annual price growth has risen at the strongest rate since November 2022, but this is due in large part to the comparison with weaker growth this time last year.
“Recent price rises build on a largely positive summer for the UK housing market. Prospective homebuyers are feeling more confident thanks to easing interest rates. Such has been the resilience of house prices that the average property is now just £1,000 shy of the record high set in June 2022 (£293,507).
“While this is welcome news for existing homeowners, affordability remains a significant challenge for many potential buyers still adjusting to higher mortgage costs.
“With market activity picking up and the possibility of further interest rate reductions to come, we expect house prices to continue their modest growth through the remainder of this year.”
Karen Noye, mortgage expert at Quilter, said: “A dip in activity is usually to be expected in the summer months, but this year it appears to be minimal, and we are instead seeing signs of an ongoing recovery in the housing market. Though the report from Halifax is somewhat at odds with others, such as Nationwide which reported a fall in prices in August (see story below), there remains a general consensus that growth, at least on an annual basis, is picking up speed.
“The Bank of England’s decision to cut its base rate from 5.25% to 5% at its most recent monetary policy meeting (in August) will no doubt have contributed to the relatively robust market we have seen this summer, and as conditions become more predictable, we could see a rebound in prices in the autumn.”
The next Bank of England Bank Rate decision is due on 19 September.
Mark Harris at mortgage broker SPF Private Clients said: “The mortgage environment remains volatile, with lenders pulling deals and repricing at short notice. However, unlike a few months ago, the difference now is that mortgage rates are falling rather than rising, which is good news for affordability. Mortgage rates are at their lowest levels since March.
“As rates have fallen, we have seen activity noticeably increase. Estate agents report that August was busy as motivated movers who may have delayed for a while have got on with their transactions, while we have seen people take advantage of more palatable rates.”
30 August 2024: Easing Of Mortgage Costs Gives Market Boost
- Annual growth at 2.4% in August
- Prices edge down 0.2% month-on-month
- Average cost of a home in August at £265,375
Monthly house prices nudged downwards by 0.2% in August to an average £265,375 (from £266,334 in July), but a strong annual rate of growth is indicating a resilient market, writes Laura Howard.
The average cost of a UK home in August was 2.4% higher than a year ago, according to Nationwide’s latest house price report. It’s a slight increase on the 2.1% recorded in July and marks the fastest pace of growth since December 2022 when the figure was at 2.8%.
Robert Gardner, chief economist at Nationwide commented: “While house price growth and activity remain subdued by historic standards, they nevertheless present a picture of resilience in the context of the higher interest rate environment and where house prices remain high relative to average earnings which makes raising a deposit more challenging.”
He added: “Providing the economy continues to recover steadily, as we expect, housing market activity is likely to strengthen gradually as affordability constraints ease through a combination of modestly lower interest rates and earnings outpacing house price growth.”
Lenders have been pegging down the cost of mortgage deals for the last few weeks, both in the lead-up and following the Bank of England cutting interest rates from 5.25% to 5% on 1 August. The next decision by the Bank’s rate-setting monetary policy committee is on 19 September with expert opinion divided on whether a further cut will be made.
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, said: “With more sub-4% mortgage rates now available and the prospect of more interest rate cuts this year, buyers are flooding back into the market as improving affordability levels raise the likelihood that people can net their desired home.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, added that, “while the days of rock-bottom mortgages may be long gone, a more palatable pricing is helping sentiment.”
Energy-efficiency having greater effect on property values
Nationwide’s data also looked at the extent to which the energy efficiency of a property can affect its value by including ratings from energy performance certificates (EPCs) on owner-occupied homes in its house price calculations. It found that a more energy efficient property (rated A or B) attracted a modest premium of 2.8% compared to a similar home with the most common D rating. There was little difference for properties rated C or E compared with D.
The effect of the EPC was most noticeable on properties rated F or G (the lowest energy efficiency ratings) which were valued at 4.2% lower than a similar D rated property, on average (see chart below).
Nationwide’s Robert Gardner said: “Our research suggests while energy efficiency impacts remain relatively modest, they have increased relative to pre-pandemic levels, with A/B properties now attracting a larger premium compared with 2019 and F/G properties seeing a larger discount.
“Decarbonising and adapting the UK’s housing stock remains critical if the UK is to meet its 2050 emissions targets, especially given that emissions from residential buildings account for 15% of the country’s greenhouse gas emissions.”
28 August 2024: Buyers Remain ‘Price Sensitive’
- Annual price inflation at 0.5% in July
- House prices rise 1.4% in first seven months of 2024
- Typical home in July worth £266,400
House price inflation remains subdued, according to the latest figures from online property portal Zoopla, with average prices in July just 0.5% higher than last year, writes Jo Thornhill.
The average home last month was worth £266,400, a nominal increase on the £265,600 average figure recorded by Zoopla in June.
But Zoopla’s experts report that market conditions are continuing to improve. The last seven months showed a bigger rise in average prices of 1.4%, when compared to the rise over the last 12 months.
The property portal also recorded a 20% increase in buyer demand in the four weeks to 18 August, compared to the same period in 2023, and a 23% increase in the number of agreed sales.
It said that estate agents are listing an average of 33 homes for sale in August, the highest level since 2017.
The long-awaited cut in interest rates by the Bank of England on 1 August was welcome news for borrowers. However, Zoopla says the five-fold increased in demand is due to the large drop in demand during summer of 2023, rather than cheaper borrowing.
Potential buyers remain highly price sensitive. One in five properties (20%) listed on the market in August has undergone reduction to the asking price by 5% or more, an above-average level, according to Zoopla. Although it is below the record high of 23% seen in Autumn 2023.
Properties that require an asking price cut take more than twice as long to sell as homes without asking price changes.
Zoopla’s data shows the average time to find a buyer for homes that have no need for a price reduction is 28 days, for example, compared to 73 days for properties which have had at least a 5% cut to their original asking price.
Of the 20 cities across the country where Zoopla collects asking price data, Belfast has seen the biggest price rises in the year to July 2024 at 5.1%. The average home in the city is now on the market at £176,700.
Prices in Manchester, Liverpool and Glasgow have also held up relatively well, rising by 2%, 1.7% and 1.6% respectively. Average asking prices in July were £226,600 in Manchester, £159,600 in Liverpool and £149,400 in Glasgow.
Among the biggest annual price falls, the average asking price of a home is £136,100 in Aberdeen, which has seen average reductions of 2.5%. Portsmouth has seen annual falls of 1.1% taking the typical asking price to £279,100.
Average asking prices in London remain the highest across the country at £536,300, a nominal annual rise of 0.2%.
Richard Donnell, executive director at Zoopla said: “Momentum in the sales market continues to build as mortgage rates drift lower and more sellers gain the confidence to list their home for sale. Buyers have much greater choice which will support sales numbers, but this will keep prices rises in check.
“Buyers have less purchasing power than two or three years ago and remain price sensitive. This means sellers can’t afford to get ahead of themselves on where to set the right price for their home. If you need to cut the asking price by 5% or more then your home will take twice as long to sell or may not sell at all”.
Nathan Emerson, chief executive of Propertymark, the trade body for estate agents, said: “There is a real positivity within the housing market now that the economy seems to have stabilised.
“This is the Government’s chance to take advantage of current market confidence by clarifying a more precise time-frame for its target of building nearly two million new homes across the next parliamentary term.”
19 August 2024: Portal Predicts 1% Annual Increase In Values
- Average asking prices drop 1.5% in August
- Bank Rate cut boosts market activity
- Average Rightmove price £367,785
The average asking price of properties coming on to the market fell by 1.5% month-on-month in August, taking annual price inflation to a nominal 0.8%, according to online property portal Rightmove, writes Jo Thornhill.
The drop in new seller asking prices, equivalent to a fall of £5,708 in real terms, takes the average price nationally to £367,785.
Rightmove says this type of drop is usual for the summer months. August has seen a monthly decline in prices from July for the last 18 years, according to its data.
The portal says that market activity has gone up due largely to the cut in interest rates by the Bank of England, which reduced the Bank Rate from 5.25% to 5% on 1 August, boosting buyer and seller confidence.
Rightmove reports a 19% jump in the number of potential buyers contacting estate agents since 1 August, compared to the same period in 2023. This compares to an 11% increase seen in July this year. The number of new sellers putting their homes on the market is up 5% compared to this time last year.
Rightmove has subsequently raised its forecast for house price inflation for 2024 from a drop of 1% to an increase of 1% for the year.
Tim Bannister, Rightmove’s director of property science, said: “The first Bank Rate cut since 2020 has sparked a welcome late summer boost in buyer activity.
“While mortgage rates aren’t yet substantially lower since the rate cut, the fact that the long-hoped-for first cut has finally arrived, and mortgage rates are heading downwards, is positive for home-mover sentiment. As the summer holiday season comes to an end, the conditions are there for a more active autumn market.”
Regionally asking prices fell in August in all areas, except Yorkshire and Humberside, where average asking prices rose by a nominal 0.3%. Yorkshire has seen annual price rises of 3.5% and the average asking price is £252,835.
Despite this month’s regional price falls, over the year to August prices have risen in every region except the East of England, South West and the South East of England.
The East of England has seen an annual price drop of 1.4%, where the average asking price is £418,295. In the South West average seller prices are down by 2.4% and the average price is now at £383,416, and in the South East, prices are down by 1.2% year on year and the average price is £480,108.
In London asking prices were up by 0.7% in August, although year on year they are down by 2.1% to an average of £677,794.
Jeremy Leaf, north London estate agent, said: “There is no doubt the cut in Bank Rate has been a shot in the arm for the housing market, particularly in terms of new enquiries during the traditionally quiet summer period.
“However, the change was anticipated for such a long time so helped soften mortgage pricing on the high street. This meant the impact on property values has been modest to date. Of course, Rightmove’s asking prices are not selling prices but do reflect an important trend in seller aspiration and confidence.
“With so many buyers, sellers and others involved in the transaction process now on holiday, obtaining commitment to proceed has been tricky although we certainly expect momentum will return from early September.”
Matt Thompson, head of sales at estate agent Chestertons, said: “Despite the summer holidays, we are currently seeing more house hunters starting or resuming their search than we did in August of last year.
“This increase in buyer activity is predominantly driven by lower interest rates and the availability of more attractive mortgage products which is even tempting first-time buyers to take the first step towards home ownership.”
14 August 2024: Market Buoyed By Cheaper Mortgage Costs
- UK house prices rise 2.7% in year to June
- Monthly rise for June recorded at 0.5%
- Average home worth £288,000
Average property values increased by 2.7% in the year to June, according to the latest figures from the Office for National Statistics (ONS), writes Jo Thornhill.
On a monthly basis, the data shows prices were almost flat, at just 0.5% higher in June compared to May. However, it’s the fourth consecutive monthly rise, following eight previous months of annual price falls.
It takes the average property value in the UK to £288,000.
The ONS index, which uses Land Registry data on sold properties, shows variations in the countries and regions. The average house price in England is up by 2.4% annually and the average value of a home is now at £305,000.
In contrast prices were up by 4.3% in Scotland, where the average property value is now £192,000. Wales saw more modest annual price growth at 1.8% The average property price in the country now stands at £216,000.
Northern Ireland has shown the biggest annual increase, with a rise of 6.4% in the year to the end of the second quarter of 2024 (to the end of June 2024). Average property prices in the country stand at £185,000.
Among the English regions, annual house price inflation was highest in Yorkshire and the Humber, where average values increased by 4.7% in the 12 months to June. The average home in the region is now worth £215,347.
London, which is home to the highest average property values at £523,134, recorded the lowest annual price inflation of any region at just 1.2%.
Source: ONS, July 2024
Larger homes, including terraced houses, semi-detached and detached properties have seen the biggest annual house price increases compared to flats and maisonettes, according to the ONS data.
The average semi-detached house has risen by 4% in the year to June, for example, from £269,998 to £280,895.
Source: ONS, July 2024
Commenting on the ONS figures, Jeremy Leaf, estate agent and a former RICS residential chairman, said: “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 interest rates.”
Mobeen Akram, new homes director at mortgage broker the Mortgage Advice Bureau, said: “This latest house price data, coupled with the recent reduction in interest rates, is certainly a welcome relief for those who have been waiting for positive change in the housing market.
“Though the Bank Rate reduction to 5% is good news, we may still experience a slow market over the next while, as we move through the natural summer lull.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “With inflation rising by less than expected, this shouldn’t negatively impact the Bank of England’s plan for reducing interest rates, with the markets pricing in a further two rate reductions this year.
“The first rate cut since the pandemic has been well received and sends out an important message that rates have peaked and are on a downward trajectory. How fast those further rate reductions come will depend on the state of the economy and inflationary pressures.”
Lenders have been reducing their mortgage costs in recent days, with Barclays and Nationwide now offering the cheapest five-year fixes from 3.83%.
7 August 2024: Bank Predicts Further Growth As Rate Cuts Begin
- Average values up 2.3% year-on-year
- House prices up 0.8% in July
- Average property price £291,268
House prices jumped up last month, taking the annual rate of price inflation in the year to July to 2.3%, according to the latest figures from Halifax, writes Bethany Garner.
This annual rate of change is a notable upswing from the 1.6% recorded for three consecutive months between April and June.
Recent cuts in mortgages rates, including some five-year fixed-rate offers below 4%, seem likely to encourage further housing market activity,
As in June, Northern Ireland saw the strongest growth in house prices. Properties in the region rose in value by 5.8% on average in the year to July – up from 4.1% the previous month. The average property in Northern Ireland now costs £195,681.
The North West of England also recorded strong growth, with the average property price rising 4.1% in the year to July, to £232,489.
In Wales, average prices rose 3.4% year-on-year, to £221,102. This marks the largest annual price rise Halifax has recorded in the region since October 2022.
Scotland also saw average prices increase, rising 2.1% to £205,264 in the year to July.
Only one UK region experienced a year-on-year decrease in average house prices – Eastern England. Properties in the region are now worth £330,282 on average, down 0.4% on an annual basis.
Homes in London continue to be more expensive than any other UK region. As of July, the average price for a home in the capital was £536,052, up 1.2% compared with July 2023.
Amanda Bryden, head of mortgages at Halifax, said: “Against the backdrop of lower mortgage rates and potential further Bank Rate reductions, we expect house prices to continue a modest upward trend throughout the remainder of this year.”
Holly Tomlinson, financial planner at Quilter, said: “Prospective buyers are now faced with a dilemma about whether to fix their mortgage now or wait for rates to come down further.
“Lots of clients in the midst of remortgaging or buying are considering tracker mortgages without early repayment charges, allowing them to benefit from future rate cuts with the option to fix when rates are lower.”
Iain McKenzie, chief executive officer of the Guild of Property Professionals, said: “The recent Bank of England rate cut and reductions in mortgage rates are positive developments for the market.
“These factors should help improve affordability for many potential buyers, especially first-time buyers who have been struggling to get onto the property ladder. However, we must acknowledge that affordability constraints and limited housing stock continue to pose challenges.”
1 August 2024: Market Steady Ahead Of Potential Rate Cut
- House prices up 0.3% in July
- Annual rise stands at 2.1%
- Average property price £266,334
Average property prices grew by a marginal 0.3% in July, according to the latest figures from Nationwide building society, writes Jo Thornhill.
The annual rate of price growth has picked up from 1.5% in May to 2.1% for July, taking the average home to a value of £266,334 and showing modest recovery in the market.
Robert Gardner, chief economist at Nationwide, said: “The slight pickup in the annual rate of house price growth from 1.5% in June, to 2.1% in July is the fastest pace seen since December 2022. However, prices are still around 2.8% below the all-time highs recorded in the summer of 2022.
“Housing market activity has been holding steady in recent months with the number of mortgages approved for house purchase at around 60,000 per month. While this is around 10% below the level prevailing before the pandemic, it is still a respectable pace given the higher interest rate environment.”
Gardner points to the fact that affordability is still stretched for many prospective buyers. For borrowers with a 25% deposit, the rate on a five-year fixed rate mortgage deal has been around 4.6% in recent months. This is more than double the 1.9% average recorded in 2019.
Nationwide says that for first-time buyers the monthly mortgage payment is typically equivalent to around 37% of take-home pay, well above the 28% average prevailing pre-Covid and the long-run average of 30%.
The Bank of England’s Monetary Policy Committee (MPC), which decides on interest rates, is due to meet at noon today (1 August).
A reduction to the Bank Rate, currently at 5.25%, would be welcomed by cash-strapped homeowners and potential house buyers.
But with the US Federal Reserve leaving US interest rates on hold yesterday (it voted to keep rates at the target range of 5.25% to 5.5%, a 23-year high), most experts are predicting the Bank of England will follow suit. That means the next rate cut is now more likely to be in September.
Amy Reynolds, head of sales at Richmond-based estate agency Antony Roberts, said: “Hot, sunny weather, combined with buyers, who may have delayed their plans, now wanting to get on with their house moves is resulting in a busy time for the housing market.
“In our offices, we are hearing increased talk about the prospect of interest rates falling, with vendors hoping and buyers wishing that this will happen imminently.
“However, buyers need to be careful what they wish for as cheaper mortgages will almost certainly mean higher asking prices. If we see a flurry of new applicants coming back to the market, encouraged by cheaper mortgage rates, then these higher prices are likely to be achieved.”
Nathan Emerson, chief executive at estate agency trade body Propertymark, said: “The housing market is regaining a real sense of positivity. Now that inflation appears to be staying within target it would further stimulate growth within the housing sector if the Bank of England feels confident enough to allow a slight interest rate cut when the Monetary Policy Committee meets later today.
“It has been widely anticipated that they may look to lower the Bank Rate, and at a time when we have a new government who have committed to building two million new homes by 2029, this combination of factors could lead to a rejuvenation for the housing sector.”
