UK Property Market
What’s Happening to UK Property Prices?
The average house prices in the UK rose to £289,723 in July, marking a 0.6% increase compared to June. On an annual basis, the values were 2.2% higher than a year ago.
The most recent data from Halifax indicates that house prices in the UK reached their highest level in two years in August.
This increase is attributed to a growing confidence among homebuyers, driven by the recent drop in mortgage rates.
Additionally, the property portal Rightmove revealed that the asking prices set by new home sellers in the UK were 0.8% higher in September compared to August. Despite lagging behind other indices, Land Registry data is generally considered the most reliable measure of how house prices are changing in the UK.
Latest House Price Changes Across the UK
The UK housing market exhibits varied trends across different regions. In July, average house prices in England experienced a modest 0.2% increase compared to the previous month, while in Wales, prices rose by 1.1%. Notably, Scotland witnessed a substantial 3.1% surge in prices month-on-month, according to the latest Land Registry data.
On an annual basis, average house prices in England rose by 1.6%, in Wales by 2.0%, and in Scotland by a noteworthy 6.0%. Additionally, Northern Ireland demonstrated a significant 3.6% monthly increase and an impressive 6.4% annual rise in Q2 (April-June) 2024.
These statistics present a compelling overview of the dynamic and promising nature of the UK housing market, offering valuable insights for stakeholders and industry observers.
The London Factor
In July 2024, the average house price in London stood at £520,747, reflecting a 0.4% decline compared to the preceding year and a 0.3% decrease compared to the previous month.
It is important to acknowledge the significant variability in property prices across different London boroughs. For instance, in July 2024, the borough of Kensington and Chelsea reported the highest house prices in London, with an average property cost of £1.16 million. Conversely, Barking and Dagenham exhibited the lowest house prices in London, with an average cost of £340,664.
The obvious point to note is that London’s property market continues to be a thriving economy unique to anywhere else in the UK. Buoyancy continues with growth forecasts expected to be up to 3% in the next year. Outer London properties continue to see a boom in growth as post pandemic workers continue to reduce travel and exercise smarter purchases with working from home here to stay.
Are House Prices Falling?
The most recent house price data from Nationwide indicates a decline in property prices for the month of August.
This marks the first monthly decrease since April, while on an annual basis, property values continued to rise by 2.4% compared to the previous year.
Additionally, Halifax data for the same month shows a 0.3% increase in house prices for August and a 4.3% increase on an annual basis.
It is important to note that property prices and the trajectory of price movements are subject to constant change. Nonetheless, there are indications that the underlying trend of steadily rising property prices, which has generally been the norm in recent years, may have resumed.
The UK property market continues to buck all trends and has proven to be astute investments – withstanding pressures from the pandemic and global inflationary concerns.
Is Now a Good Time To Buy?
Financially, the optimal time for purchasing a house aligns with periods when both mortgage rates and house prices are at low points. However, accurately timing such a convergence is challenging. Therefore, it is prudent to prioritize finding a property and mortgage that align with your financial means without overextending them. Although mortgage rates have decreased since the middle of last year, they remain notably higher than during the majority of the 2010s and early 2020s. Consequently, if financial resources are constrained, waiting for rates to decrease may be the most viable option. Encouragingly, numerous experts anticipate a continued decline in mortgage rates over the forthcoming months. Earlier in the year, certain analysts projected a potential decline in house prices, which could have enhanced affordability. Nevertheless, recent adjustments to these forecasts suggest an impending rise in property prices. Rising rates has seen an exponential growth in passing rent values for landlords. London in particular continues to see yields of 4.5% and more. Where mortgage debt is not required, a shrewd property investment can still be a significant income generator for the future.
Ultimately, the future trajectory of house prices and mortgage expenses defies precise prediction. Consequently, the decision of whether the current period presents an opportune time for property acquisition hinges largely on individual circumstances, priorities, and perspectives. Seeking professional mortgage advice can facilitate informed decision-making, yet the definitive choice to proceed with a purchase at present or defer it remains a personal determination.
