This time last year, the table below was negative – but not to the expectation of any of the real doom mongers in the property market! The highest fall shown was Nationwide, with prices 5.3% below what they were in 2022. Just one year on, with rates still at 5% versus 5.25% last year, Nationwide are showing prices can still rise at this level of base rates – so far by 2.4% year on year.
This table shows that price wise you can see they are pretty similar, but mostly up just slightly. This clearly shows how incredibly resistant property prices are currently to base rate fluctuations, which, in the past, have caused serious downturns in the market. This is partly due to the fact that most people who own, don’t have a mortgage, but also due to those being on a mortgage taking out long term fixed for 2-5 years.
The other ‘saviour’ which appears to have delivered less volatile property prices is the fact that first time buyers (FTBs) since 2014 have to be assessed at average long term interest rate levels and lenders are restricted to how much they can lend at 4.5 times income.
Finally, one economic factor that has helped both the rental market and buying and selling is the consistent growth of wages which has helped to fuel rents, while helping support people affording higher mortgage rates.
Overall, the rapid climb in base rates, may have curbed inflation, but it hasn’t done the damage some forecast to the housing market – so far!
Property price and market indices headlines
Bank Rate cut spurs further upturn in market activity
“Average new seller asking prices see a seasonal drop of 1.5% (-£5,708) this month to £367,785. August has seen a monthly decline in prices from July for the last 18 years, with this month’s fall in line with the long-term average.”
Increased supply weighs heavy on southern prices
“Asking prices dipped for the first time in nine months, by 0.2%, during the last month across England and Wales, yielding to both high supply and seasonal trends.”
Sales market activity responds positively to the recent easing in mortgage interest rates
“New buyer demand rises noticeably over the month.”
Annual house price growth edged higher in August
“Annual growth rate picked up to 2.4%, from 2.1% in July.”
UK house prices edge up to hit two-year high
“House prices increased by +0.3% in August, after +0.9% rise in July.”
Housing market sees Summer lull
“Average prices 2.6% lower than a year ago.”
UK house prices increase 1.4% so far this year
“House prices are 1.4% higher over the first 7 months of 2024 having fallen over the final half of 2023.”
Insights from this month’s indices:
– The first Bank of England rate cut for four years has led to an immediate upturn in buyer activity:
– The number of potential buyers contacting estate agents about homes for sale has jumped from 11% up on the prior year across the month of July, to 19% up since the 1st of August compared to the same time a year ago.
– The number of sales being agreed is now 16% ahead of the near-peak-mortgage-rate period of a year ago.
– The number of new sellers coming to market is 5% ahead of last year as confidence to move grows.
– Home prices are up 1.5% compared to September 2023.
– Despite both a notable slowdown and a 10-year high in unsold stock, the sales market momentum remains relatively healthy, as indicated by both the Typical Time on Market (median) for unsold property in England and Wales being seven days less than in September 2019 and our Market Turnover Indicator showing a performance comparable to pre-pandemic years.
– The total number of new instructions entering the market during August 2024 was 14% more than during August 2023 and 8% more than August 2019.
– UK house prices fell 0.2% month on month in August.
– Annual growth rate picked up to 2.4%, from 2.1% in July.
– Fastest pace of annual growth since December 2022.
– Energy efficiency becoming more important in influencing what buyers will pay for a home.
– Year-on-year prices are up +4.3%, the strongest rate since November 2022.
– Higher annual growth largely reflects the base impact of weaker prices a year ago.
– More affordable areas of northern England see small gains; London showing signs of recovery.
– Lower mortgage rates set to perk up sales and broaden market recovery.
– All measures of activity are up year-on-year – the long-awaited base rate cut has not had a major impact on market activity so far.
– Price inflation has improved across all areas, remaining slightly negative in southern England but with London positive at 0.2%.
– 1 in 5 homes has had their asking price cut by 5% or more, an above average level showing continued price sensitivity amongst buyers.
– It takes 28 days to sell a home with no asking price reduction, but 73 days if you overprice and then need to reduce by 5% or more.