The latest UK House Price Index for May 2024 reveals a steady increase in property prices despite the general election. Data shows a 1.2% rise in sold prices between April and May 2024 and a 2.2% increase on an annual basis. Notably, Yorkshire and the Humber experienced the highest annual growth at 3.9%, while London saw the lowest at 0.2%, although London also recorded the highest monthly growth at 3.9%.
Regional Variations and Market Drivers
Nathan Emerson, CEO of Propertymark, noted, “It is fantastic to see that the general election did not disrupt the housing sector greatly, and despite many challenges, the market still delivered growth. Propertymark remains keen to learn more on how the supply of 1.5m new homes across this parliamentary term will be delivered.” Emerson also emphasised the importance of making home ownership a realistic goal and expressed hope for a reduction in interest rates to spur targeted mortgage deals.
Emma Cox, MD of Real Estate at Shawbrook, observed that while there was a dip in house buying activity, prices rebounded in May. She said, “This, coupled with the likelihood of interest rate cuts this year and a recent spate of lenders lowering mortgage rates should provide optimism for the remainder of the year.”
Impact on Landlords and Buyers
The recent cuts in mortgage rates by leading high street lenders have created a sense of security for prospective buyers. Sara Palmer, Distribution Director at The Mortgage Lender (TML), commented, “A consistent increase in house price growth this year suggests a growth in consumer confidence as well. For those looking to get on the property ladder, speaking to a broker will ensure they are ‘mortgage ready’ when the time comes.”
Richard Harrison, Head of Mortgages at Atom Bank, remarked on the positive market sentiment, saying, “The fact that the ONS has now reported three months of straight house price increases is a good indication of the growing confidence in the market.”
Market Outlook and Future Expectations
The market’s resilience is further highlighted by the comments of Ed Phillips, CEO of Lomond, who pointed out that despite the distractions of the general election and other events, the market is poised to pick up pace. Phillips noted, “This market momentum is only likely to accelerate when a cut to interest rates does materialise and this is very much a case of when, not if.”
Similarly, Marc von Grundherr, Director of Benham and Reeves, highlighted the anticipation of interest rate cuts, saying, “It’s only a matter of time before interest rates are cut. When this does happen, we expect it to act as a significant shot in the arm to the UK property market.”
The UK housing market has shown remarkable resilience and adaptability in the face of political and economic uncertainties. With expected interest rate cuts on the horizon, there is a strong sense of optimism among industry experts that the market will continue to thrive, providing opportunities for both buyers and landlords.
