UK property market August 2024

Sales

The current UK housing market is stable with high sales activity recorded over the first two quarters of 2024. The average price of new-to-market properties for sale in June 2024 changed very little compared to levels in the previous months and will have a positive effect on the number of transactions, which are still below the norm. The average price of a newly listed London property for sale by Rightmove in July 2024 was £692,544. Overall, the UK sales market is rebalancing with London looking more attractive this summer.

The Bank of England's future base interest rate adjustments will have the biggest impact on further property price growth. On 1 August, the Bank reduced the rate by.0.25% to 5%. The current mortgage market is already offering products based on the expectations that the base bank rate is likely to continue falling before the end of this year.

Chase Evans London branches finalised a record number of sales in May 2024, from a wide collection of apartments in E14 and Docklands to large Central London properties in Goodman’s Fields in E1 and Elephant Park SE17. Year on year, Chase Evans sales completions are up 38%. Sales managers are reporting that new instructions and buyer demand have also remained higher than during the same period last year.

Most UK property professionals expect modest property price growth following the high level of recent mortgage approvals, political stability after the UK general elections held on 4 July, and higher affordability linked to increased earnings. Wages in the UK grew by approximately 5.7 percent in May 2024, although when adjusted for inflation, wages only grew in real terms by 2.5 percent. (Office for National Statistics, ONS July 2024)

Investors and buyers purchasing new UK homes should expect increasing prices due to the rising building costs linked to the UK construction output, which has recorded a 10% year-on-year decline. According to a recent Arcadis 2024 International Construction Costs report, London is ranked as one of the most expensive construction locations among 100 of the world’s large cities across six continents.

Lettings

London rental market continues to thrive even though the UK rent annual inflation is easing from a record high, as mentioned in the most recent ONS report. In the 12 months to June 2024, London’s rents increased 9.7%. The Rightmove advertised rental tracker for the period April to June 2024 states that London rents were 4% higher than in the same period last year, and the rent growth has been steadily slowing since the peak of 16% in 2022. “The overall balance between supply and demand has continued to improve during the second quarter of this year. However, the latest snapshot of the rental market highlights how busy it remains compared to more normal levels seen pre-pandemic – meaning both letting agents and tenants are unlikely to feel any improvements yet.”

The number of enquiries each rental property is receiving from would-be tenants is now 17 which is more than double the 8 at this time in 2019. The number of available homes to rent is still 20% below 2019, while 22% more tenants are looking to move than in 2019. 

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