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House Prices Experience Mixed Fortunes: Modest Growth and Regional Disparities Emerge in Early 2024

The housing market presents a complex scenario in the early months of 2024, characterised by slight growth amidst ongoing financial pressures. March saw a minor decline in house prices by 0.2% month-on-month, yet there was a year-on-year increase of 1.6%, indicating a cautious optimism in the market. With an average house price of £261,142, the regional disparities are pronounced: Northern Ireland witnessed a 4.6% price surge, contrasting with a 1.7% decrease in the South West. This nuanced picture suggests a market that is slowly gaining momentum but still faces significant headwinds.

Expert Insights on Market Dynamics
Sarah Coles, Hargreaves Lansdown’s head of personal finance, describes the market as having “a slight spring in its step,” tempered by “higher prices and unyielding mortgage rates.” The market’s resilience is evident in a 9% rise in sales, according to Zoopla, yet challenges persist. Coles points out that “mortgage approval levels are still around 15% lower than before the pandemic,” a statistic that underscores the lingering impact of economic uncertainty on the housing sector. The rise in mortgage rates, from 5.75% to 5.8% within a month, further complicates the affordability for prospective buyers, highlighting the delicate balance between market enthusiasm and financial constraints.

Commentary from other industry leaders paints a cautiously optimistic picture for the future. Nathan Emerson, CEO of Propertymark, notes the positive trend in house prices as a sign of recovery following years of economic instability. He stresses the need for government action to ensure housing affordability through increased construction. Foxtons CEO Guy Gittins speaks to the “notable uplift” in market activity, suggesting a budding confidence among buyers and sellers alike. However, he also acknowledges the shadow cast by higher mortgage rates on purchasing power.

Lomond CEO Ed Phillips and Marc von Grundherr of Benham and Reeves both anticipate further growth, pointing to the underlying market stability and the approaching high season of property transactions. They suggest that while the market is pausing, it is poised for a robust performance in the coming months. This sentiment is echoed by Jason Harris-Cohen of Open Property Group, who advises patience for sellers amid a cautiously advancing market. Yopa’s CEO, Verona Frankish, adds a note of optimism, suggesting that the current dampening effect of mortgage rates on buyer appetite is temporary and that a surge in market activity is imminent.

Looking Ahead
As the UK housing market navigates the early part of 2024, it is clear that while challenges remain, there are strong indicators of potential growth and resilience. The insights from market experts reveal a sector that is cautiously optimistic, balancing the pressures of mortgage rates and economic uncertainty with the signs of recovery and growth. With regional disparities in price changes and the ongoing adjustments in the market, the coming months will be crucial in shaping the trajectory of the UK’s housing sector.

Nationwide has published its House Price Index for March 2024: Annual house price growth edges up in March.