By In summary, it finds:
- Short-term picture improves
- Housing market shrugs off September’s malaise
- Budget stamp duty measures will boost activity in coming months
- Southern England continues to hold back wider market recovery
- Average house price in October £354,822, up 0.2% on September, down 3.4% annually
e.surv Acadata England & Wales HPI October 2024
The latest report on house prices in England and Wales from Acadata highlights a mixed recovery and continued regional disparities in the housing market. The average sale price in October 2024 rose slightly to £354,800, marking a 0.2% increase from September, though still 3.4% lower than October of the previous year and 6% below the peak in late 2022. This uptick reverses a six-month trend of price declines and aligns with recent demand increases, spurred by improved mortgage rates and stabilizing living costs.
Regional Variations and the North-South Divide
Price recovery varies widely across regions. London and the South East, traditionally significant contributors to national metrics due to higher property values and transaction volumes, continue to experience pronounced price declines (4.8% and 5.1% year-on-year, respectively). Excluding these regions, the annual price decrease for England and Wales shrinks to 2.6%. In contrast, the North East and North West have shown greater resilience, with only slight annual price reductions (0.9% and 0.8%, respectively), suggesting a “two-speed” market where northern areas have fared better than their southern counterparts.
Impact of Policy Changes and Market Outlook
Policy changes announced in the recent budget are set to influence housing market trends. The 2% increase in stamp duty for landlords and second-home buyers continues the government’s focus on curbing investment-driven demand. Additionally, starting April 2025, the stamp duty thresholds will revert to pre-September 2022 levels, affecting first-time buyers (FTBs) who may face increases of up to £6,250 in stamp duty costs on properties up to £500,000. This change is expected to heighten demand in the short term as buyers rush to finalize purchases before the threshold reduction, potentially leading to a decline in demand post-April 2025.
The report also suggests that increased withdrawals from pension funds could boost the “Bank of Mum and Dad,” potentially aiding young buyers through family support. This factor, combined with potential rate cuts by the Bank of England, may provide additional support for market activity in the near term.
Projected Trends and Economic Outlook
While the Office for Budget Responsibility (OBR) projects gradual strengthening in prices and transactions due to anticipated wage growth and reduced interest rates, Acadata indicates a cautious outlook. The next few months may see heightened activity and modest price pressures, but the market is likely to cool again post-April 2025. Furthermore, with the anticipated release of a long-term government housing strategy, new policies affecting home ownership and rental markets could bring further changes, impacting regional recovery patterns differently.
In summary, while the slight price increase in October signals stabilization, challenges remain. Regional disparities persist, with northern regions showing more stability than southern areas. Short-term demand is expected to increase due to budget-related stamp duty incentives, but the broader economic and policy landscape suggests a cautious approach to market expectations heading into 2025.
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