The UK housing market continues its upward trend with house prices increasing by 1.5% month-on-month in August 2024, reaching an average of £292,924. This marks the strongest annual growth of 2.8% since November 2022, according to the latest House Price Index released by the Office for National Statistics (ONS).
Consistent growth over six months
The latest ONS data highlights a steady rise in UK house prices over the past six months. From March 2024, when the average house price was £279,017 with a 0.3% month-on-month increase, prices have consistently climbed each month to reach £292,924 in August 2024. Annually, this represents a growth of 2.8%, up from 0.4% in March 2024. This consistent growth indicates a resilient property market despite ongoing economic challenges.
Expert insights on the market
Industry experts have shared their thoughts in on the positive trends observed in the housing market. Nathan Emerson, CEO of Propertymark, commented, “It is extremely upbeat to see the year continue with consistent growth. The overall performance of the housing market remains a key indicator of wider economic health, and it’s encouraging to see more people are demonstrating they have the confidence and affordability to approach the buying and selling process. There are still sizeable challenges ahead to ensure long-term stability within the marketplace, especially on the back of an ever-growing population.”
Ed Phillips, CEO of Lomond, added, “A sixth consecutive month of positive house price growth demonstrates that the UK property market is very much heading in the right direction, boosted by a growing level of buyer confidence and an increased willingness to transact. Whilst interest rates remain a factor, we’re likely to see further cuts before the year is out and this will only strengthen the momentum that has been building across the market in 2024.”
Marc von Grundherr, Director of Benham and Reeves, stated, “Summer may have come and gone, but the green shoots of increased buyer activity that have been sprouting for much of the year are now starting to blossom into robust transaction volumes and consistently positive rates of house price growth. Whilst we’re unlikely to see any sales market incentives delivered in this month’s Autumn Statement, the housing market is likely to march on undeterred and we’re set for a very strong end to the year, despite the usual seasonal lull that comes with the Christmas period.”
Future outlook amidst policy changes
As the market continues to grow, experts remain cautiously optimistic about the future despite potential policy changes. Verona Frankish, CEO of Yopa, noted, “August brought the first interest rate cut in over four years and it’s clear that this boost to buyer sentiment has had an almost immediate impact on the UK property market, with house prices rising notably throughout the month. Not only have we seen consistent improvements on a monthly basis, but this is the sixth month in a row that house prices have increased on an annual basis. This longer-term metric is a far more reliable measure with respect to the returning health of the UK property market and bodes very well for the remainder of the year.”
Ben Nichols, Managing Director at RAW Capital Partners, highlighted the influence of economic factors, saying, “Today’s official data indicates that the market is benefiting from a more relaxed economic environment, which was instigated by the Bank of England’s recent rate cut. With another cut anticipated at the BoE’s meeting in November, it is clear that the market is now in a much more stable period compared to previous years, which should support further capital growth in the coming months.”
Paresh Raja, CEO of Market Financial Solutions, echoed this sentiment, adding, “The upcoming Budget is the cloud that hangs overhead though. Speculation is rife concerning everything from capital gains tax and inheritance tax through to planning reforms and regulation within the buy-to-let sector. Once the Chancellor has delivered her fiscal statement, the challenge will be for lenders and brokers to assist borrowers in understanding the implications, and then adapting as necessary to ensure the property market can continue the positive growth we’ve seen so far in 2024.”
The road ahead for investors
As the housing market shows robust growth, landlords and property investors are closely monitoring the situation to make informed decisions. With consistent price increases and an active market, the opportunities for investment remain strong. However, the potential for regulatory changes and economic shifts means that flexibility and strategic planning will be essential for continued success.
Jean Jameson, Chief Sales Officer at Foxtons, remarked, “It is positive to see buyer confidence returning to the market following the rise in interest rates in 2022, which subsequently led to a tougher 2023. We saw significant activity in the sales market in September, with buyer demand rising by 25%. Additionally, vendor activity was notable, with instructions up by 35%. This is all positive news and hopefully with another interest rate drop, we will see continued market growth into the new year.”
For UK landlords and property investors, the latest ONS data underscores the importance of staying informed and adaptable in a dynamic market. With house prices on the rise and buyer confidence growing, the sector appears poised for sustained growth, provided that economic conditions remain favourable and potential regulatory challenges are effectively managed.
As the UK property market continues to evolve, stakeholders will need to keep a close eye on upcoming economic policies and their potential impacts, ensuring that they can navigate the landscape successfully and capitalise on emerging opportunities.
The report can be read here: Private rent and house prices, UK – Office for National Statistics (ons.gov.uk)
