UK Housing Market Update: July 2024

Key Trends and Figures

Stable House Prices with Increased Buyer Activity

Over the past year, house prices have seen minimal movement, with an increase of just £310. This stability contrasts with a notable uptick in market activity, where buyers now pay an average of 96.8% of the asking price. This recovery in buyer confidence, particularly in London and the South East, marks a shift from previous trends where properties often sold at a greater discount.

Regional Variations in Price Changes

The housing market's performance varies significantly by region. Northern Ireland leads with a 3.9% price rise, while the East of England experiences a 1.2% decline. This divergence underscores the differing economic conditions and housing demand across the UK.

Increased Supply and Market Balance

The supply of homes for sale has risen by 16% compared to last year, providing more choices for buyers and contributing to a more balanced market. On average, estate agents list 33 homes for sale, the highest level in six years. This increase in supply is crucial for maintaining price stability and facilitating smoother transactions.

Sales Trends and Formerly Rented Properties

Sales activity has grown by 16%, with a notable presence of formerly rented properties entering the market. Approximately 12% of homes currently for sale were previously rental properties. This shift is partly due to changes in taxation and increased regulation, prompting some landlords to sell. However, a significant portion of these properties remains within the rental sector, either being bought by new landlords or retained by existing ones.

Insights from Farrell Heyworth

Farrell Heyworth has observed these trends firsthand, seeing how increased supply and stable prices benefit buyers and sellers. Buyers enjoy more options and competitive pricing, while sellers benefit from a steady demand, ensuring their properties attract serious offers. Another note is the importance of regional market awareness, as local economic conditions significantly influence buyer behaviour and pricing.

Market Outlook for the Rest of 2024

The outlook for the UK housing market suggests continued modest growth. Zoopla projects a potential increase in house prices of up to 2% by the end of the year, with the most substantial gains likely outside of southern England, where affordability remains a significant constraint. The forecasted sales volume in 2024 is around 1.1 million transactions, slightly below the long-term average.

The possibility of a base rate cut could provide a boost to consumer confidence, potentially increasing market activity. However, the impact on mortgage rates and housing affordability is expected to be limited.

Long-Term Considerations

The housing market's stability hinges on broader economic factors, including wage growth and housing supply. With incomes expected to rise faster than house prices over the next 12-24 months, there is potential for improved affordability. However, significant challenges persist, particularly for lower-income households facing difficulties accessing home ownership and rental properties.

As we progress through 2024, the UK housing market demonstrates a stable yet cautiously optimistic outlook. The balance of supply and demand, alongside regional variations, continues to shape market conditions. Both buyers and sellers are encouraged to stay informed and consider the local context when making property decisions. With the ongoing adjustments in the market, there are opportunities to navigate successfully through this evolving landscape.