18 September 2024
If you are covering the latest UK house price index, please see the following comment from Karen Noye, mortgage expert at Quilter:
“The headline figure from today’s data is that average house prices saw a modest increase of 0.6% between June and July 2024. However, the data also show that annual house price growth reached 2.2%, down from the revised estimate of 2.7% in June. While prices continue to rise, the slower pace suggests the market is still grappling with the high interest rate environment coupled with a natural slowdown which is to be expected during the summer months.
“While the dip in growth could be attributed to typical seasonal factors, the latest UK property transactions statistics reveal a more complex picture. The number of residential property transactions valued at £40,000 or more was estimated at 91,000 in July, up 6.7% compared to a year earlier. However, on a month-to-month basis, transactions fell slightly by 0.6%, reflecting cautious buyer sentiment as mortgage costs and affordability concerns remain in play.
“Regionally, the housing market continues to display varied performance. The East Midlands saw the sharpest monthly price increase, with prices up by 1.3% in the year to July 2024. On an annual basis, the North East led the way, recording a 3.8% rise in house prices, underscoring the ongoing regional disparities in the UK housing market. In fact, prices in London dropped by 0.3% since June 2024. This means prices in the capital have fallen by 0.4% annually taking the average property value to £521,000. This is still far out of reach for most first-time buyers with affordability a major issue.
“All eyes will be on the Bank of England’s interest rate decision tomorrow. While the expectation is that rates will remain the same, any change could help more people take the leap and get back to house hunting. Similarly, those borrowers approaching the end of fixed-rate mortgage deals who are bracing for higher repayments might get a small reprieve but for the most part lenders already price in future drops. With interest rates still elevated, homeowners and prospective buyers face the dilemma of locking in rates now or waiting for further cuts, and as a result the popularity of tracker mortgages has blossomed.
“For those navigating these uncertain conditions, seeking professional mortgage advice will be critical to ensure the most favourable terms. As the market adjusts to more predictable conditions, buyers may find opportunities emerging in the months ahead, but caution will remain key as affordability challenges persist.”
