827, 000 £ 1, 242, 092 - 2. 7%
666 £ 32. 8b n 14, 130
ORTGAGE AP P ROVALS (M AY )
HOLDING FIRM
Confidence in the market is returning, despite interest rates remaining high. Further buoyancy in the housing market is expected once the political climate settles following the general election.
IMPROVING OUTLOOK
June saw a 0.2% rise in UK house prices taking the annual rate of growth rate to 1.5%, up from 1.3% in May (Nationwide). Recent revisions to house price forecasts show a more optimistic outlook for the year, helped by inflation reaching its 2.0% target in May (ONS) and a bank rate cut imminently expected. Consensus forecasts suggest that by the end of 2024 the bank rate will be 4.5%, down from 5.25% currently (HM Treasury). Although the reduction in mortgage debt costs has been modest so far, the combination of better interest rate forecasts and a brighter economic outlook has provided more room for house price growth this year. The latest forecasts suggest 1.4% house price growth to the end of 2024, a significant improvement to the -2.6% forecast at the start of the year (Dataloft by PriceHubble average of forecasts).
ACTIVITY
As the outlook brightens, consumer confidence increased for the third month in a row in June (GfK Consumer Confidence Tracker). The average time to sell continues to reduce, falling to 60 days in May, down from the highs of 78 days in January and the fourth consecutive monthly fall (Rightmove). The number of mortgage approvals held relatively firm in May at 59,991 compared to 60,821 in April (Bank of England). However in the first five months of this year there have been 28% more mortgage approvals than a year ago.
Transaction levels are increasing with the latest HMRC figures showing a 17% rise in May compared to a year earlier. Almost a third (32%) of agents say transaction levels are higher than three months ago, with 11% saying that levels are over 5% higher (Dataloft by PriceHubble, Poll of Subscribers). Whilst there has been a temporary stalling in some confidence indictors, other confidence indicators show improvement, near-term sales expectations point to sales volumes picking up modestly over the next three months. The twelve month outlook is even more upbeat, with a net balance of +43% participants anticipating an uplift in sales activity, an increase from the previous month (RICS).
MARKET MOMENTUM REMAINS
Most buyers and sellers have proceeded with their plans since the election was called, 95% of people planning to move home said that the election will not affect their plans. Over the last four weeks, the number of sales being agreed has remained steady at 6% higher than a year ago. Buyer demand has also remained stable and is now 5% higher than last year (Rightmove). The only indication of election-related caution is a slight decrease in the number of new sellers, particularly in the more discretionary, high-end segment of the market.
In the prime market, the average price of a property is £1,242,092, having moderated slightly by -2.7% year-on-year. Prime markets in Scotland and the East Midlands are experiencing positive annual growth of 10.3% and 1.2% respectively.
£ 5 3 6 ,0 0 0
£ 7 4 6 ,2 1 2
+ 1 0 .3 %
£ 3 4 2
£ 5 2 3 ,0 0 0
£ 7 1 7 ,8 7 0
-1 .7 %
£ 3 7 3
£ 5 8 7 ,0 0 0
£ 7 8 1 ,4 3 9
-1 .1 %
£ 3 8 8
£ 4 8 4 ,0 0 0
£ 6 3 4 ,6 0 9
-1 .2 %
£ 3 4 6
£ 7 6 3 ,0 0 0
£ 1 ,0 4 7 ,5 1 4
-3 .1 %
£ 4 9 7
£ 9 8 5 ,0 0 0
£ 1 ,4 2 0 ,7 2 9
-4 .1 %
£ 5 9 5
£ 4 0 7 ,0 0 0
£ 5 4 9 ,9 9 6 -2 .6 %
£ 2 9 2
£ 5 1 5 ,0 0 0
£ 6 9 3 ,7 8 0
-0 .5 %
£ 3 5 7
£ 5 3 7 ,0 0 0
£ 7 1 3 ,6 3 3
+ 1 .2 %
£ 3 4 2
£ 8 1 9 ,0 0 0
£ 1 ,1 1 8 ,7 5 6
-3 .4 %
£ 5 3 9
£ 1 ,6 8 0 ,0 0 0
£ 2 ,7 4 2 ,2 0 9
-2 .9 %
£ 1 ,2 9 1
£270,160
£827,000
£1,242,092
£222,445
£731,000
£1,157,852
£214,385 £685,000 £1,083,482
£267,010
£665,000
£932,678
£441,330
£1,150,000
£1,653,166
£281,911 £846,000 £1,253,789