18 December 2024
If you are covering the latest government house price index for October, please see the following comment from Rosie Hooper, chartered financial planner at Quilter Cheviot:
"The latest UK House Price Index for October 2024 reveals that house prices have risen by 0.2% month-on-month, with annual growth standing at 3.4%, bringing the average UK property value to £292,000. We are now nearing the average property in the UK being over £300,000 which given the affordability pressures in the market is remarkable. January can often be a busy time in the housing world too as moves put off before Christmas are put into action with more buyers out looking at properties, so more house price increases are likely in the new year.
"However, this morning’s inflation data showed an uptick, underscoring persistent price pressures in the economy. With the Monetary Policy Committee set to meet on Thursday, expectations are that the Bank of England will hold interest rates steady, but further ahead, it is anticipated that there will be at least two 0.25% reductions in the base rate next year. These cuts could provide some much-needed relief for affordability, particularly for first-time buyers and those looking to remortgage. However, the flip side is this could increase demand in the market and therefore push prices up even higher in 2025.
"This is especially true as the limited supply of housing stock remains a significant concern in the UK. Even with improvements in affordability due to lower rates, the persistent imbalance between supply and demand could continue to drive house prices higher, particularly in areas where demand is strongest.
"First-time buyers remain particularly vulnerable. Still elevated inflation is eroding disposable incomes, while higher mortgage rates and stricter lending criteria are limiting options for those trying to step onto the property ladder. Although lower base rates next year may ease borrowing costs, affordability will still depend on broader economic stability and wage growth."
