Rental market continues to heat up
UK house prices increased by 2.9% in the 12 months to September 2024, up slightly from the 2.7% annual growth in August, according to the latest government data.
The average house price across the UK reached £292,000 in September, marking an £8,000 increase compared to the same period last year.
Regionally, house price growth varied. In England, average prices rose by 2.5% to £309,000. Wales saw a modest increase of 0.4% to £217,000, while Scotland experienced a more significant rise of 5.7% to £198,000. In Northern Ireland, prices grew by 6.2% in the year to the third quarter of 2024, reaching an average of £191,000.
The ONS Private Rent and House Price data also showed that among English regions, the North East recorded the highest annual price growth, with a 6.5% rise in the year to September. London, however, was the only region to see a decline, with average prices falling by 0.5% over the same period.
Average UK house prices increased by 2.9%, to £292,000 in the year to September 2024, down from £293,000 in August 2024.
— Office for National Statistics (ONS) (@ONS) November 20, 2024
Average UK private rents increased by 8.7% in the year to October 2024, this is up from 8.4% in September 2024.
Read the release ➡️ https://t.co/WBUtFim5Lr pic.twitter.com/3OMizqMQAb
“A recent spike in activity in the housing market has prompted this latest house price rise,” said Richard Harrison (pictured left), head of mortgages at Atom bank. “Data from Rightmove shows that the number of sales is up by nearly a third compared to a year ago, while there has also been strong growth in buyers contacting estate agents about listed properties, which is up by 17%.
“The glaring imbalance between housing supply and the resurgent demand from would-be homeowners is only likely to push prices higher still as we head into 2025.”
With the dust from Reeves’ budget now settling, Tanya Elmaz (pictured centre), director of sales at Together, said many would be reassessing their property and mortgage plans ahead of the new year in addition to a surge of activity to beat the changes to stamp duty.
“It’s likely we’ll see first-time buyers continue to explore alternative routes onto the property ladder like Shared Ownership, where we expect a 126% growth in lending by 2029,” she added. “The scheme will continue to be play a part in helping first-time buyers manage affordability.”
Meanwhile, private rents in the UK increased by 8.7% in the 12 months to October, up from the 8.4% annual growth recorded in the previous month.
The average rent across the UK rose to £1,348 in England, reflecting an 8.8% increase. In Wales, rents grew by 7.9% to £766, while Scotland saw a 6.6% rise to £976. Northern Ireland recorded a 9% increase in rents in the year to August 2024, reaching an average of £797.
“Rents have risen substantially over the past year, and the latest Office for National Statistics data confirms it,” said Alex Upton (pictured right), managing director of specialist mortgages and bridging at Hampshire Trust Bank.
“Demand for rental properties continues to outstrip supply, and we’re likely to see this trend drive rents even higher in the coming months. Unless there’s a meaningful increase in supply — which isn’t on the horizon — this competition will keep pushing rents up.
“The uncertainty around the Budget made some investors pause, waiting to see if any tax changes would impact their plans. Now that the government’s intentions are clear, and with the Bank of England’s recent base rate cut, investors have the clarity they need to pick up those paused deals.”
Gerard Boon, managing director of Boon Brokers commented: “Since Labour’s autumn Budget, it is of no surprise that demand in the housing market has fallen. This fall in demand has resulted in a fall in property prices. We have seen many property chains collapse due to Labour’s change to Stamp Duty Land Tax for second homes.
“As borrowers purchasing a second home are now required to pay an SDLT surcharge of 5% instead of 3%, these transactions have become unaffordable for many. This has become particularly true for high value transactions. When making this change to stamp duty, the government may not have appreciated the knock-on effect that it would have on the wider housing market.”
He added: “Having spoken with professionals involved in the housing market, such as solicitors, estate agents and developers, this one change to stamp duty land tax has already adversely impacted their businesses. We are likely to see property prices fall further in upcoming months.”
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