Our monthly property market review is intended to provide background to recent developments in property markets as well as to give an indication of how some key issues could impact in the future.
We are not responsible or authorised to provide advice on investment decisions concerning property, only for the provision of mortgage advice. We hope you will find this review to be of interest.
The property market continues to find its feet after a difficult 2023, with buyers remaining cautious due to the higher cost of borrowing.
Mortgage rates may not be as high as they were last summer, but they are still elevated. While most experts agree that Bank Rate will be cut this year, there is uncertainty surrounding when this will happen. The Bank of England reported an increase in agreed sales resulting in mortgage approvals reaching their highest level in 18 months in March.
Price sensitivity remains among buyers, causing a slight dip in house prices in April, according to Nationwide. However, property experts Savills still envisage growth of 2.5% in 2024, and buyer confidence is expected to pick up once interest rates fall. This should close the widening gap between supply and demand, as sellers are currently returning to the market at a faster rate than buyers.
Annual rental growth across the UK was 6.9% according to Zoopla, with Scotland and the North East regions showing growth rates of 9.6% and 9.3% respectively.
The prime market has been feeling the effects of higher mortgage rates, with the capital experiencing a significant slump.
According to data from Knight Frank, annual price growth in prime central London fell to -2.6% in April – the lowest figure in three years. Prime outer London did not fare as badly, with a smaller annual decrease of -1.2%. Knight Frank speculated that the weak growth may have been exacerbated by recently announced rule changes for individuals with non-domicile tax status.
On a positive note, supply in London has risen, with instructions rising by 10% between January and April of this year.
Shutterstock/Andrei Nekrassov
The divide in market activity between the south of England and the rest of the UK is becoming more evident.
The disparity can be traced back to the 2008 global crisis; the London property market bounced back afterwards and took southern England with it. By 2014, house prices in the capital were increasing at an annual rate of 20% according to Zoopla – an exponential growth rate unmatched by the rest of the country.
As a result, there is now significant disparity in housing affordability across the UK – data from USwitch shows that, in 2023, the average first-time buyer in Greater London had a deposit of £108,848. This is over three times more than those buying in the North East, who put down an average deposit of £29,740.
Zoopla’s Executive Director of Research, Richard Donnell commented, “With mortgage rates unlikely to get much lower in the short term, income growth is going to have to do the hard work in resetting affordability across southern England.”
HOUSE PRICE INDEX (March 2024) | 148.3 |
AVERAGE HOUSE PRICE | £283,000 |
MONTHLY CHANGE | 0.7% |
ANNUAL CHANGE | 1.8% |
*(Jan 2015 = 100)
Source: The Land Registry
Release date: 22/05/24
Next data release: 19/06/24
| REGION | Monthly Change (%) | Annual Change (%) | Average Price (£) |
| ENGLAND | 0.5% | 1.0% | £299,321 |
| NORTHERN IRELAND (QUARTER 4 – 2023) | 0.4% | 4.0% | £178,499 |
| SCOTLAND | 2.3% | 6.7% | £191,678 |
| WALES | 0.9% | 1.3% | £213,753 |
| EAST MIDLANDS | 0.3% | 1.0% | £242,223 |
| EAST OF ENGLAND | 0.3% | 0.8% | £341,979 |
| LONDON | 0.9% | 3.4% | £499,663 |
| NORTH EAST | -0.4% | 3.2% | £158,569 |
| NORTH West | 1.1% | 3.8% | £216,501 |
| SOUTH EAST | 0.3% | -1.3% | £373,223 |
| SOUTH WEST | 0.2% | 0.5% | £316,262 |
| WEST MIDLANDS REGION | 1.4% | 2.4% | £246,298 |
| YORKSHIRE AND THE HUMBER | 2.2% | 5.0% | £209,868 |
| Property Type | Annual Increase |
| Detached £440,085 | 2.5% |
| semi-Detached £275,684 | 2.2% |
| Terraced £230,406 | 1.3% |
| Flat/Maisonette £229,813 | 1.0% |
Source: The Land Registry Release date: 22/05/24
“Affordability constraints are still a significant challenge, for both new buyers and those rolling off fixed-term deals. Mortgage rates have edged up again in recent weeks, primarily as a result of expectations around future Bank of England base rate changes, with markets now pricing in a slower pace of cuts. If, as is still expected, downward moves in Bank Rate come into play later this year, fixed mortgage rates should fall. Combined with the resilience displayed by the housing market over recent months, we now expect property prices to rise modestly over the course of 2024.”
Amanda Bryden, Head of Mortgages, Halifax
Source: Halifax, May 2024
Contains HM Land Registry data © Crown copyright and database right. This data is licensed under the Open Government Licence v3.0
All details are correct at the time of writing (22 May 2024)