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House prices rise as falling inflation paints more positive outlook for market

Date: 22 May 2024

1 minute read

22 May 2024

If you are covering the latest UK house price index, please see the following comment from Holly Tomlinson, financial planner at Quilter:

“In the year to March 2024, UK house prices increased by 1.8% on a seasonally adjusted basis according to the latest government house price index, up considerably when compared to the 0.2% decrease in the 12 months to February 2024. On a monthly basis, prices lifted by 0.7%. This left the average house price sitting at £283,000, up by around £5,000 compared to the same time last year.

“Although this increase shows that the housing market is managing to plod along despite significant economic headwinds, it continues to be unpredictable.

“High interest rates alongside ongoing cost of living pressures have continued to put the brakes on a more significant rise in house prices. Mortgage rates have fluctuated over the past few weeks due to upticks in swap rates, though this has been tempered by lenders trying to remain good value against their competitors. As a result, buyers have been reluctant to come to market during this period of volatility when having the rug pulled out from under them is a real possibility. This has led prospective buyers to be in a state of paralysis waiting until rates have decreased to ease affordability pressures.

“Nonetheless, this morning's inflation figures have painted a more optimistic outlook for the housing market, as headline inflation has now fallen to 2.3%. Lenders will now be more inclined to lower mortgage rates, as this fall in inflation should make the path to lower interest rates clearer for the Bank of England. A more stable outlook coupled with lower mortgage rates could be a recipe for more demand and higher prices.”

Megan Crookes

External Communications Executive