2024 has been a very good year for UK property news so far and the latest news confirms that the market is back on track.
Data from Halifax shows that house prices reached a two-year high in August 2024 and confidence has returned to the market in a big way following the recent interest rate cut.
While they have not quite reached the all-time record of £293,507 seen in June 2022, house prices have surpassed the level they were at before the Liz Truss government’s disastrous ‘mini budget’.
That budget sent mortgage costs through the roof and caused house prices to fall for the first time in many years. The recovery process has been ongoing since then through a range of economic challenges including high inflation, the cost of living crisis and a global energy shortage.
Now, property values are back to where they were with lots of potential to keep growing higher. Amanda Bryden, head of mortgages at Halifax, said: "With market activity picking up and the possibility of further interest rate reductions to come, we expect house prices to continue their modest growth through the remainder of this year.”
Beginning of a new property cycle
This latest news confirms what has been obvious for some time now – we are at the beginning of a new property cycle.
This means that property prices are likely to keep rising in the coming years, and the falls seen in 2023 will be looked back on as historic lows between two growth cycles.
For investors and homebuyers, that means that the best property decisions will be the ones made in the next six-to-12 months. Failure to act means you will risk missing out on the market’s upturn and all the benefits that come with it.
For example, JLL’s residential forecast shows that house prices could rise as much as 17.6% by the end of 2028. With that in mind, buying now at the beginning of this cycle is an extremely savvy move for anyone who is able to do so.
Analysts from Savills are even more bullish and predict that the average UK house price could grow by as much as 21.6% over the same time period.
In the North West, growth will be even higher at 28.8%, making this the ideal time to invest in Manchester buy to let property. The city’s growth is at the heart of the North West’s success, and city centre luxury residential homes like those at Berkeley Square are some of the most popular properties in the UK.
Are rents in the UK rising?
For investors, there is another layer to consider on top of the forecasted house price growth which will turn into capital appreciation.
Rents are also on the up following a record-breaking 2023. While not rising quite as fast as last year, the average rent is still rising approximately 8.6% year-on-year according to the Office for National Statistics.
Looking further ahead, there are more rent rises to come. JLL’s residential forecast shows that the average national rent could rise by as much as 18.8% by the end of 2028 on top of today’s historically high rent levels.
That is great news for investors and makes it even more urgent to get ahead of the rises and consider new UK property investments for sale now.
If you are interested in UK buy to let investment property and decide to wait, you are limiting your returns and reducing the potential profit you can earn.
