"A consistent increase in house price growth this year suggests a growth in consumer confidence as wel"
- Sara Palmer - The Mortgage Lender
The latest UK House Price Index from the Land Registry has revealed that average UK house price annual inflation climbed to 2.2% in the 12 months to May 2024, up from an increase of 1.3% in the 12 months to April 2024.
Provisional estimates show that the price of a typical UK home stood at £285,000 in May 2024, up by £6,000 from the same month last year. Average house prices in the 12 months to May 2024 increased in England to £302,000 (2.2%), increased in Wales to £216,000 (2.4%) and increased in Scotland to £191,000 (2.5%). The average house price increased in the year to Q1 (Jan to Mar) 2024 to £178,000 in Northern Ireland (4.0%).
On a non-seasonally adjusted basis, average UK house prices increased by 1.2% between April 2024 and May 2024, up from an increase of 0.2% during the same period 12 months ago.
Of English regions, annual house price inflation was highest in Yorkshire and the Humber, where prices increased by 3.9% in the 12 months to May 2024. London was the English region with the lowest annual inflation, where prices increased by 0.2% in the 12 months to May 2024.
Emma Cox, MD of Real Estate at Shawbrook comments: “Despite a dip in house buying activity, house prices returned to growth in May. This, coupled with the likelihood of interest rate cuts this year and a recent spate of lenders lowering mortgage rates should provide optimism for the remainder of the year.
“Professional landlords will be hoping for some post-election pricing consistency, and will also be keeping an eye out for any announcements from the new Government which may have an impact on the buy-to-let market. For the time being, landlords will be keeping a watchful eye on prices and rates to explore any opportunities to expand their portfolios.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “Our buyers and sellers are not taking as much advantage in the numbers we expected of the slow but steady growth in house prices and wages which may be making property more affordable.
"Though a little dated this most comprehensive of all the housing surveys, as it includes the approximately 40 per cent of properties bought without mortgages, has proved a reliable indicator of market health.
"The figures reflect the period in particular before the announcement of the election but that event put the brakes on activity for some as it created considerable uncertainty. Many will hope today’s announcement of inflation holding steady and on target will hasten the albeit small likely drop in base rate next month, which is of more relevance to decision-making."
Nathan Emerson CEO of Propertymark comments: “It is fantastic to see that the general election did not disrupt the housing sector greatly, and despite many challenges, the market still delivered growth.
"Propertymark remains keen to learn more on how the supply of 1.5m new homes across this parliamentary term will be delivered, along with what support may be offered to first-time buyers. Homeownership must always remain a realistic and workable proposition for those who choose it. Across the coming weeks, we hope to see a dip in interest rates too, and for this to translate into lenders offering a raft of targeted mortgage deals.”
Sara Palmer, Distribution Director at The Mortgage Lender (TML) comments: “A consistent increase in house price growth this year suggests a growth in consumer confidence as well.
"The recent cuts in mortgage rates by leading high street lenders provide a sense of security for prospective buyers, especially with rumours of a reduced interest rate by the Bank of England to come later this summer, helping to drive demand. For those looking to get on the property ladder, speaking to a broker will ensure they are ‘mortgage ready’ when the time comes.”
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, says: “With prices continuing to rise month-on-month, it’s further bad news for first-time buyers and second steppers trying to move up the ladder. Combine higher prices with higher borrowing costs and home ownership remains beyond the reach of many.
"There has been no collapse in activity post-election, rather we have seen more confidence among buyers and sellers. The market is fairly active, with a good number of sales being agreed.
“However, conditions are steady and what we need is some sort of trigger for the housing market to pick up. The new government must tackle planning issues, making local councils take a commercial view and less of a NIMBY approach to development that will house those most in need and boost the economy through the employment of builders and other tradespeople as the chain of suppliers used to build a new home is substantial."
Iain McKenzie, CEO of The Guild of Property Professionals, comments: “Another solid month of growth in house prices is great news for sellers during the summer months when footfall at estate agents is at its highest.
“Modest levels of annual growth in London and the South East are not surprising, considering prices have been overinflated in the region for many years.
“The latest transactions data shows a fifth consecutive increase in sales, meaning that more people are getting on the property ladder. This can only be good news for buyers and sellers alike, with sellers in particular not being forced to reduce their asking price so significantly.
“The political upheaval has settled, and the new government is getting its feet under the table. We have already seen a renewed commitment to house building which will go a long way towards filling the gaps in areas with a shortage of available homes.
“The key to allowing first-time buyers to make the most of new homes is ensuring that they are affordable and competitively priced for the area.
“The next barrier that needs to be tackled is the availability of mortgage deals and how easy it is for households to make their repayments.
“With inflation coming down within target levels and economists hopeful for inflation on core services to fall too, we should see the Bank of England lower interest rates in the coming months. This should be the shot in the arm that lenders need to ramp up better fixed-rate mortgage offers.”
