UK property market, November 2024

Property Sales

One month in the final quarter of the year, and the UK property sales  market remains strong with a high level of activity and house prices up on both a monthly and an annual basis. Generally, there is an improved affordability linked to a competitive lenders market offering more mortgage products that cut down the cost of borrowing.  

Chase Evans sales are steady with increased offers and sales completions. New sales instructions remain considerably higher than during the same period last year.

Rightmove’s latest house price index (October 2024) estimates that the number of homes for sale was 12% higher than a year ago and at the highest level per estate agent since 2014. Average UK new seller asking prices rose by just 0.3% (+£1,199) to £371,958 whereas the average London new seller asking house price for the same period (October) rose 1.8% to £694,906. The number of properties for sale across Britain hit a 10-year high in October, and the number of sales agreed was up by 29% year-on-year.

The latest Office for National Statistics (ONS) house prices index for September (published 16 October 2024):

·         Average UK house prices increased by 2.8% to £293,000 in the 12 months to August 2024 (provisional estimate); this annual growth rate is up from 1.8% in the 12 months to July 2024.

·         Average house prices increased in England to £310,000 (2.3%), in the 12 months to August 2024.

The latest House Price Index release from the Nationwide Building Society based on its mortgage lending says that the UK price growth is at a near two-year high, the highest since November 2022.  ‘Places like Manchester, Liverpool and Birmingham remain firm favourites among property investors seeking strong returns from the UK housing market,’ says Nationwide.

Trends that have helped improve buyers’ affordability in September are the rise of the average household disposable income and new mortgage products with lower borrowing costs especially for new house-purchasing customers, rather than those who are re-mortgaging. The latest data shows that the borrowing on consumer credit has increased, and the Bank of England monthly mortgage approvals have gone up in September to 65,600, which is the highest level since August 2022.

Rental market

Tenant demand outpaces total rental supply throughout the UK including London. There are still 25% fewer rental properties available in 2024 compared to 2019. This is at the times when homeownership remains out of reach for many with a large proportion of tenants expecting to remain in the PRS (Private Rented Sector) long-term.

The recent ONS (Office for National Statistics) report highlights that only 232,470 new homes were built in the UK over the past year, and the available rental stock remains below the pre-pandemic levels.

Zoopla expects the UK rents to rise 3-4% over 2024, with the supply/demand imbalance set to remain into 2025, supporting continued growth.

In the most recent Royal Institution of Chartered Surveyors (RICS) survey, Alec Harragin, MRICS, Savills Plc summarises the London residential market: ‘London rental growth has been more muted, in line with a regular winter slowdown and as affordability constraints remain. The impact of Labour’s rental reforms will cause some landlords to sell up but those who take a longer view could benefit from reduced stock and lower mortgage rates.’

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