The ONS has just released figures showing that the average UK private rents increased by 8.4 per cent in the last 12 months and house prices have also seen an incline – making this the fifth consecutive increase.
The latest index shows that the average UK house price has increased by +0.6 per cent month on month from £288,043 in June 2024 to £289,723 in July 2024, while the latest annual change for July 2024 sits at +2.2 per cent.
The most recent UK figures also show consecutive increases in price over the last six months, from February 2024 (£278,689 and +0.2 per cent month on month to July 2024 (£289,723 and +0.6 per cent month on month).
When considering annual change, the UK figures show consecutive growth for the last five months, from March 2024. While there have been general murmurings that housing shortages and affordability could be affected, the industry has reacted with positivity to the latest index – calling the market ‘stable and resilient’.
Industry experts say that the latest index ‘all help to maintain momentum’ which could provide a potential autumnal boost to the market.
Kevin Roberts, Managing Director, Legal & General Mortgage Services, said:
“The property market isn’t showing any signs of a summer hangover, with falling mortgage rates – as low as 3.77% for a five-year fixed deal and the first sub 4% two year fix now being available, all helping to maintain momentum.
“Today’s announcement of a fifth consecutive increase in annual house prices speaks to a market that is dynamic. Following the recent base rate cut, some experts are predicting a further boost in market activity and October is set to be a key month for remortgaging too, meaning it’s not just prospective buyers who will be behind growing activity in the mortgage market.
“Borrowers looking to capitalise on lower rates should speak to a financial adviser – a recent survey indicated that 39% of first time buyers regretted not using one. Speaking to a professional adviser can help borrowers cut through the noise and land the best possible deal for what is likely to be the biggest investment of their life.”
Others say that ‘positive annual growth and a modest fall in month on month figures’ will garner mixed reaction from estate agents. Affordability concerns have been cited by the CEO of The Guild of Property Professionals alongside housing shortages, however he claims the ‘sense of stability’ is good news for sellers and lenders.
Iain McKenzie, CEO of The Guild of Property Professionals, comments: “Another month of positive annual growth tempered by a modest fall in month-on-month figures will receive a mixed reception among estate agents and home-sellers.
“Affordability concerns and a shortage of housing in some areas of the country are still an obstacle for prospective buyers, but the sense of stability we are seeing is good news for sellers and is allowing lenders to be more generous with mortgage offers.
“It still looks likely that house prices will remain stable for the rest of the year, though it won’t be until the Budget that we get an idea of how they will shape up for 2025.
“We would like to see some incentives to buy in the Budget. Alternatively, a clear strategy for building new homes and spelling out what they are going to do to support young first-time buyers struggling to save for a deposit.
“The property industry is at a crossroads and the next few months will be critical. If government decision-making is strategic and practical, any signs of volatility would be appeased.”
The ‘flatlining’ July economy has been given a new lease of life as the MD of Fine & Country says the market is showing resilience in the face of ongoing challenges by still displaying ‘healthy levels of annual growth’.
Nicky Stevenson, Managing Director at national estate agent group Fine & Country, said: “The economy may have flatlined in July, but the property market is showing resilience in the face of ongoing challenges and is still showing healthy levels of annual growth.
“This divergence highlights the complexity of the current economic landscape. Recent indicators present a mixed picture. On one hand, GDP growth has stalled, suggesting a potential slowdown in economic activity.
“Meanwhile, inflation has stayed close to the government’s 2% target, with today’s data showing it held steady at 2.2% in August.
“Economists maintain a cautiously optimistic outlook on inflation trends. Although they anticipate a rise in inflation during the latter half of 2024, they expect it to ease again and approach the 2% target by early next year.
“More positively, the Bank of England made the first cut to interest rates in more than four years in August. This drop was a significant move, making borrowing more affordable and potentially stimulating housing market activity.
“Experts predict that we could see a further drop in the base rate later this year, although this remains contingent on inflation trends and other economic factors.
“The October budget will be another key moment to watch, with potential tax rises being discussed as a means to manage public finances. If introduced, these could affect consumer spending power and add pressure to households.
“Broader economic indicators paint a mixed picture. Growth is stagnant, inflation is steady, and potential tax changes loom. However, the housing market remains robust, and recent mortgage rate cuts hint at a positive shift ahead.
“These factors will play a key role in shaping the economic outlook in the coming months.”
