826, 000 £1,243,896 -2.5%
£36.2bn
£667 15,604
ORTGAGE AP P ROVALS (AP R)
The property market continues to build momentum, with increasing buyer demand and the supply of homes reaching record levels. The economic picture is brightening, raising hopes for an imminent interest rate cut.
Inflation fell to just 2.3% in the 12 months to April 2024, nearing its 2% target (ONS), whilst the economy grew by 0.6% between January and March 2024, marking the end of the recession (ONS).
With the economic outlook improving, consumer confidence in May reached its highest level since December 2021 (GfK Consumer Confidence Tracker), and the base rate is widely expected to be cut soon. Economists at Capital Economics are forecasting the base rate to be at 4.5% by the end of 2024, with the first cut expected in August. An interest rate cut should improve buyer affordability, leading to increased activity and upwards pressure on prices.
Rishi Sunak has announced a 4th July General Election, earlier than many anticipated. Despite some fears that an election could pause market activity, the first interest rate drop will likely have a much larger and more positive effect on activity this year. With no significant policy changes affecting the housing market, the election is unlikely to interrupt seasonal transaction cycles, which typically peak in July and August (Dataloft (PriceHubble), HMRC). The sales pipeline is already strong, 3% higher than at the same time last year (Zoopla), and those who are already in the process of working to a sale are unlikely to pull out.
Many homeowners who delayed moves in the second half of 2023 (because of concerns over higher borrowing costs),
have been persuaded by the relative mortgage rate stability and prospect of an interest rate reduction, to get on with their move. Activity is steadily building with 90,430 sales in April, a 4.6% uptick from the previous month. Transaction levels are at their highest since March 2023 and up 9.8% year-on-year, indicating a reviving property market, with improving economic conditions easing household financial pressures (HMRC).
The number of sales being agreed in the first four months of the year is 17% higher than last year, and there is a 12% increase in the number of new sellers coming to market (Rightmove). Mortgage approvals, whilst steady month-onmonth, are up 25.8% year-on-year (Bank of England).
UK house prices rose 0.4% month-on-month in May, while the rate of annual growth picked up to 1.3%, from 0.6% in April (Nationwide). As sellers return to the market, the number of homes for sale has reached its highest level in eight years. The average agent has 31 homes for sale, up 20% on the same time last year (Zoopla), giving buyers more choice and supporting the growth of sales. The increase in supply is expected to keep house price inflation in check over 2024.
In the prime market, the average price of a property is £1,243,896, having moderated slightly by -2.5% year-onyear. Scotland and the East Midlands are experiencing positive annual growth at +13.5% and +0.8% respectively.
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£ 7 3 0 ,4 6 5
+ 1 3 .5 %
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£ 7 1 6 ,6 8 9
-0 .9 %
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-0 .4 %
£ 3 8 8
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£ 6 2 8 ,4 9 4
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£ 4 9 7
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£ 5 4 8 ,5 4 3 -3 .3 %
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-0 .1 %
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£826,000
£1,243,896 1,172,312
£1,083,752 £ £269,500 222,571 £735,000 £
£266,246
£661,000 £930,557
£441,190
£1,150,000
£1,649,001
£213,677 £682,000
£281,030 £845,000 £1,250,763