By UK Housing Market Overview – October 2024
The UK housing market continued to show resilience in October, with average house prices rising to a new peak. Despite various economic challenges, house prices increased modestly month-on-month, marking the fourth consecutive month of growth.
Key Highlights
- Monthly Increase: House prices grew by +0.2% in October.
- Annual Growth: Year-on-year increase slowed to +3.9% (down from +4.6% in September).
- Record High: The typical UK property now costs £293,999, exceeding the previous peak of £293,507 from June 2022.
- Regional Standouts:
- Northern Ireland leads with the strongest annual growth of +10.2% (average price: £204,242).
- Wales follows with +5.6% annual growth (average price: £225,543).
- London remains the most expensive, with an average property price of £543,308 (+3.5% year-on-year).
Market Insights
Amanda Bryden, Head of Mortgages at Halifax, noted that despite higher interest rates, house prices have remained stable with modest growth. Market activity is buoyed by improved mortgage rates and positive income growth, alongside an uptick in new mortgage agreements, the highest in two years. Bryden highlighted that while borrowing remains a constraint for some buyers, recent trends suggest a slow but steady path of growth ahead.
The outlook remains cautiously optimistic as borrowing costs are expected to stabilize, though new government policies such as the increased Stamp Duty on second homes and adjusted thresholds for first-time buyers may impact demand in the coming months.
Market Activity and Transactions
- Property Transactions: According to HMRC, seasonally adjusted property transactions rose by 0.9% from August to September 2024, and by +8.9% year-on-year.
- Mortgage Approvals: The Bank of England reported a +1.1% rise in mortgage approvals in September, 49.3% higher than the previous year.
- Buyer and Seller Dynamics: RICS data for September shows stable buyer activity, with increased new instructions, indicating a continued flow of properties entering the market.
Outlook
As market conditions stabilize, prices are likely to see modest growth, though affordability remains a concern. Prospective changes in interest rates and potential policy shifts, particularly around Stamp Duty, will shape buyer behaviour and could impact demand and pricing trends across regions.
Sources: Halifax, HMRC, Bank of England, RICS
Industry comments
Tomer Aboody, director of specialist lender MT Finance, says: “A confident finish to 2024 is in evidence, with buyers taking advantage of lower rates and lower inflation.
“As the Budget settles into the market, we expect interest rates to stay put for longer rather than decrease, which potentially will affect the positive upward trend going forward.
“Buyers currently have more choice of property, which is ensuring prices aren’t soaring to super high levels.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “Worries about the Budget did create some uncertainty among our buyers and sellers but many pressed the pause, rather than the stop, button.
“The underlying feeling is that interest rates will remain fairly stable or even drop a bit over coming months, which has underpinned confidence and activity.
“The increases in stamp duty for second homebuyers and landlords have resulted in some renegotiation of previously-agreed prices. But any small dip has been outweighed by new interest from first-time buyers keen to take advantage of competitively-priced property becoming available and their own stamp duty changes next spring.”
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, says: “The Bank of England rate reduction in August boosted buyer confidence, leading to an uptick in applicant registrations, viewings, and offers, contributing positively to our fourth quarter revenue. A further rate drop today would likely encourage more vendors to sell and buy, encouraging people off the fence.
“With the Budget behind us, we now have greater certainty. We are cautiously optimistic but concerned about the future stamp duty rate change for first-time buyers. Do they realise how long it takes to complete a purchase? If the Bank does cut rates today and the mortgage market reacts positively, first-time buyers should seriously consider making their move to agree a purchase before Christmas, as delays could prove costly.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: “The housing market has been significantly buoyed by lower mortgage rates, leading to more interest from prospective buyers and increased activity.
“Since UK gilt yields rose in the immediate aftermath of the Budget, this has had an effect on Swap rates which underpin the pricing of mortgages, providing an indicator as to where interest rates will be. With the exception of a few lenders who purchased Swaps before the Budget, mortgage pricing has edged upwards.
“The Bank of England is still expected to cut interest rates later today which would help boost confidence and affordability, particularly as this trend is expected to continue, albeit at a slower pace than previously thought, into the new year.”
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