New data from the UK’s latest property transactions report shows a mixed picture for the housing market in August 2024, with a modest rise in residential transactions but a continued decline in non-residential deals. While the residential market remains strong, experts warn that future growth may depend heavily on upcoming decisions regarding interest rates.
Residential transactions see growth
The latest figures reveal that the provisional seasonally adjusted number of UK residential transactions in August 2024 reached 90,210, marking a 5% increase compared to August 2023. However, this is less than 1% lower than July 2024, continuing a slight month-on-month decline for the third consecutive month. Meanwhile, non-seasonally adjusted residential transactions saw a notable 10% rise compared to the same month last year, totalling 104,330.
This increase reflects a healthier residential property market, with rising consumer confidence and more competitive mortgage deals contributing to the uptick in activity. Nathan Emerson, CEO of Propertymark, commented on the shift: “The year to date has proven transformational in terms of consumers having greater confidence and flexibility to approach the buying and selling process.”
He added that stable inflation and improved mortgage deals have contributed to the market’s buoyancy, but cautioned that the future remains uncertain. “A lot will depend on base rate decisions over the coming months and the Bank of England will likely not be keen on undoing progress made so far by unrealistically lowering the base rate too rapidly,” said Emerson.
Non-residential sector struggles
In contrast, the non-residential sector saw a decline. The seasonally adjusted number of non-residential transactions fell by 1% in August 2024 compared to the previous month and by 3% compared to August 2023. The provisional non-seasonally adjusted figure dropped even further, down 4% compared to the same period last year.
While residential transactions have remained resilient, the non-residential market faces ongoing challenges. Lower demand for commercial properties and economic uncertainty are contributing factors to the downturn.
Investor opportunities despite slower market growth
Aman Bajwa, Director and Co-Founder of Fairbridge Capital, acknowledged that the expected surge in property market activity has yet to materialise but noted opportunities still exist for savvy investors. “While today’s figures show that the anticipated burst of activity in the property market is yet to get underway, opportunities remain for savvy investors,” said Bajwa.
Bajwa highlighted the potential impact of upcoming government policies, including the Leasehold and Freehold Reform Act 2024 and the next budget, which aim to improve property market supply and standards. He also pointed out that slightly slower house price growth, paired with increasing rent growth, is enhancing the profitability of certain deals.
For investors looking to capitalise on current market conditions, Bajwa recommends exploring specialist financial products like bridging loans. “While there is still some uncertainty, specialist products such as bridging loans can help investors secure funding at the exact moment they need it, to help them take advantage of any opportunities available,” he added.
Looking ahead
As the UK property market enters the final months of 2024, much will depend on how macroeconomic factors, such as inflation and base rate adjustments, play out. For now, the residential sector continues to show promise, but both investors and landlords must stay cautious as the non-residential market faces ongoing hurdles. How the government and the Bank of England respond in the coming months will be key to shaping the future of the housing market.
