17 July 2024
If you are covering the Government House Price Index, please see the following comment from Karen Noye, mortgage expert at Quilter:
“Average UK house price annual inflation was 2.2% in the 12 months to May 2024 according to the latest Government house price index. The average UK house price was £285,000 in May 2024 which is £6,000 higher than 12 months ago.
“With the economic news flow now proving to be much more positive, this is feeding through to buyer sentiment and causing house prices to rise.
“Given inflation is now much more under control than it has been, mortgage rates have settled somewhat too giving buyers more certainty over costs and which gives buyers more confidence to bid above asking prices, pushing prices up.
“High interest rates alongside ongoing cost of living pressures have put the brakes on a more significant rise in house prices up until now. Both sellers and buyers have been reticent to make a move but under these improving picture there may be a release of pent-up demand over the next few months further buoying prices.
“The new Labour government is set to enact a slew of new planning rule changes to help it achieve its lofty housebuilding targets. However, this is a long-term measure and will only feed through to stabilising house prices in the medium to long term. So first-time buyers will unfortunately still continue to suffer with affordability challenges for a long time yet.
“We should also not expect there to be a return to the ultra-low interest rate levels that we have witnessed pre and during the pandemic. Where the natural level of interest levels ends up landing after a rate cutting cycle is still guesswork. However, it is very unlikely rates will reach the ultra-low levels many people got used to.”
