Annual house price growth has slowed, but private rents continue to climb at a “near-record rate”, according to an Office for National Statistics (ONS) report. Across the UK, property values increased by an estimated 2.2% in the 12 months to July to reach £290,000 on average, slowing from a 2.7% increase in the 12 months to June.
Average house prices increased in England to £306,000 (1.6% annual growth), in Wales to £218,000 (2.0%), and in Scotland to £199,000 (6.0%), in July. In Northern Ireland, the average house price was £185,000 between April and June 2024, which was 6.4% higher than a year earlier.
The North East was the English region with the highest house price inflation in the 12 months to July, at 3.8%. Meanwhile, house prices fell by 0.4% annually in London in July. ONS head of housing market indices Aimee North commented, “Annual house price growth slowed this month. The North East saw the highest annual growth while London was the only region to show annual price falls.”
The report also highlights that rental prices are increasing at a near-record rate. The average private rent across Britain was £1,286 per month in August 2024, an 8.4% increase compared to the previous year. London experienced a 9.6% rise in rents annually in August, which was lower than a peak of 11.2% in March 2024.
Separate ONS figures indicated that UK inflation remained steady at 2.2% last month. This holds expectations that the Bank of England will maintain the base rate at 5% in its upcoming decision. Mortgage rates have been slowly decreasing in recent weeks.
Experts predict further rate reductions, providing potential relief to borrowers. Richard Harrison, head of mortgages at Atom bank, mentioned, “The markets seem to expect another cut before the end of the year, spelling more good news for potential buyers.”
In uncertain economic times, variable rate mortgage borrowers may face challenges, while those considering fixed-rate mortgages could benefit from decreasing rates. The competition among lenders is expected to lead to continued reductions in mortgage rates as they vie for new business.
Economic indicators illustrate a mixed picture, with stagnant growth and steady inflation. However, the housing market remains resilient, with mortgage rate cuts suggesting a positive trajectory ahead, according to Nicky Stevenson, managing director at Fine & Country.
Amidst changing financial landscapes, landlords are managing various challenges, including rising costs and tax structures. Gareth Atkins, managing director of lettings at Foxtons, emphasized the importance of strategic planning to secure quality tenants, especially as market dynamics shift.
As economic uncertainties persist, the housing market continues to show resilience, with experts highlighting the importance of informed decision-making in navigating evolving financial landscapes.