Rental Prices Stay on Upward Trajectory
In 2024, rental growth slowed down from the unsustainable heights of the previous year. But the growth figures remained high, as the supply-demand imbalance in the rental market continued to push the average monthly rental price to new heights.
Tenant demand continued to ramp up and the average time on the market for a new rental property fell dramatically as renters competed for and snapped up quality homes. Savills stated in May that properties were listed for 25 days on average – ten days less than the pre-pandemic average.
North-South Divide Became More Defined
The overall UK market was sluggish in 2023, but a north-south divide was clear, with London and other southern regions experiencing small price dips, while many northern regions were registering marginal growth or remaining largely unchanged. This difference in performance between the North and South of England started to become even more defined throughout 2024, with northern regions such as the North West regularly registering the highest annual growth in England throughout 2024.
Forecasts Upgraded Thanks to Favourable Conditions
The Bank of England continued to hold the Base Rate at 5.25%, meaning the cost of borrowing remained elevated, and sensitivity to these rates caused some fluctuations in price growth. But in May, Savills noted that property market activity seemed to have mostly recovered and stabilised at around pre-pandemic levels. Rightmove’s May House Price Index showed positive momentum in the second quarter, with more buyers, sellers, and agreed sales compared to May 2023.
Based on these favourable conditions, Savills upgraded its price growth forecast for the year and for the next five years to reflect the stronger-than-expected property market in 2024. While they predicted in November 2023 that there would be an overall decline in capital value growth of 3%, the new forecast projected positive price growth of 2.5%.