This week, the base didn’t kick in, rents didn’t crescendo, but asking prices gave it a go. Indices provided a cacophony of sound, leaving PCL muffled. Earls Court exhibited just as rates were being trimmed and Lord Willets critiqued, calling it “perverse.” Welcome to another UK Property News Recap – 20.09.2024
Rightmove House Price Index
Spurred on by encouraging yet potentially misleading House Price Indices and a base rate cut, sellers hit the autumn market brimming with pricing confidence. Average asking prices increased by 0.8% (+£2,974) in September to £370,759.
The number of agreed sales was also up, rising 27% on last year, however Rightmove’s data suggests the average time taken to secure a buyer was around 60 days. Given most property prices are reduced after two weeks if there is no interest, the difference between what is asked and what is achieved will vary.
Pricing correctly, early doors, is therefore paramount if sellers want to secure a buyer especially when there is more stock for buyers to choose from.
Zoopla Rental Price Index – September 2024
Rental inflation slowed to 5.4%, the lowest for almost 3 years, largely driven by affordability restraining asking prices in cities, unlike in rural areas where prices still have room to grow.
Despite more properties coming to market and some tenants jumping on the ladder, demand still outstrips supply, with enquiries still double pre-pandemic levels. Given this, Zoopla expects rents to continue to rise 3-4% this year with further single-digit growth in 2025.
Affordability thresholds are dictating further rental growth.
Tenants that flocked further afield, for more affordable rents, have helped fuel annual rental growth in the north, which remains doggedly up at 9.6% according to Estate Agent, Hamptons. This has narrowed the gap between north and south rents, where rental growth cooled from 8.7% in August last year to 5% this year. Affordability thresholds will dictate further rental growth.
Acadata house price index – August 2024
For the sixth consecutive month, average house prices slipped. They fell nearly £1,800 or 0.5% on July 2024, making the average home worth £356,000 in England and Wales. Down 2.6% on an annual basis – a “modest” improvement on 2023 prices but still “no cigar”.
The expectation from Acadata is with each base cut there will be a renewal in price growth but for this summer, prices remained sticky.
Tax and budget concerns rock prime Central London
According to Lonres, property prices in Prime Central London were down on average 4.2% on last year, and 7.5% compared with the same month a year earlier. In comparison, new sales instructions rose by 8.1% as the wealthy attempted to cut and run – denting their pricing egos for a more tax-efficient way of life.
Earls Court finally “exhibits” planning application
Nine years on since the demolition of the Earls Court Exhibition Centre, The Earls Court Development Company submitted plans for the first phase of a development project, which is expected to cost around £10bn. This will include two towers and will provide a 4,000 boost to housing numbers with 35% of the homes set to be “affordable.”
If everything goes to “plan” work will commence in 2026.
UK House Price Index – July 2024
As summer beckoned and election results were called, house price growth slowed. The uncertainty surrounding when the next base rate cut would come, restrained growth causing it to slow in July 2024 to 2.2% from 2.7% in the 12 months to June. Based on the ONS data, this made the average home around £290,000, £6,000 higher than 12 months ago
In English regions, annual house price inflation was highest in the North East and lowest in the Capital. Prices decreased by 0.4% as affordability remained strained and caution presided over future tax hikes.
The AVG house price breakdown in the 12 months to July 2024:
- Increased 1.6% to £306,000 in England
- Increased 2.0% to £218,000 in Wales
- Increased 6.0% to £199,000 in Scotland
- Increased 6.4% to £185,000 in Q2 in Northern Ireland
UK private rents September 2024
Average UK private rents continued to swell but growth showed signs of strain. In the 12 months to August 2024 rents increased by 8.4%, down from 8.6% in the 12 months to July 2024.
The summer season saw tenants in London further squeezed; rents increased 9.6% in August but doubts on how much more they can be squeezed are moving in.
Average rents in the 12 months to August:
- Increased 8.5% to £1,327 in England
- Increased 8.5% in Wales
- Increased 7.6% in Scotland
- Increased 9.9% in Northern Ireland in the 12 months to June 2024.
Halifax further trims rates
Keen to get the lender party started, Halifax Intermediaries reduced rates, by up to 0.9%, on its home mover and first-time buyer products despite the base rate being held at 5%. The move was spurred on by swap rates falling below 4% and a need to drum up businesses to thwart the competition.
PCL London gets discounted
Knight Frank’s latest market insights reported that PCL is “functioning” but only if the price is right. Buyers are looking for deals to offset future tax increases.
As a result, the total value of transactions over the last 12 months above £10m has fallen disproportionately compared to sales volumes.
Resolution Foundation cast doubt on Labour’s new towns
The Resolution Foundation and Lord Willets, who was given the role of overseeing the report, claimed the Government’s building targets were “perverse.” His objection stems from the choice of locations the Government is pinpointing for development. Instead of focusing on areas outside of existing cities, they are opting for sites far removed from where career advancement is a reality.
The reason these sites are appealing to the government is because house prices are low in these areas so making it more affordable. However, this restricts opportunity for the very people in need of housing keen to get on the ladder.
Connectivity offers opportunity, but fields don’t.
Base Rate Holds Steady
Unsurprisingly, the base rate was held at 5% on Thursday, with the Bank of England’s Monetary Policy Committee voted 8-1 to hold. Despite this being expected, many still “waiting and seeing” before renewing their mortgage currently on a standard variable rate, will be praying for a drop, come November.
Rates may have fallen from 8.18% in March 2024 to 7.99% according to Moneyfacts but no one will really be feeling the benefit yet.
And that concludes another UK Property News Recap – 20.09.2024. If you have any comments or suggestions, please get in touch here
