Q1 2024 is behind us and there has been lots of interesting news for UK property buyers, whether that is homebuyers or investors.
Following a year of uncertainty – which the housing market largely brushed off – the forecasts continues to look bright and we head into 2024 with a sense of optimism.
We have picked out some of the most interesting news and trends in this April 2024 UK property market update.
House prices up, mortgage costs down
2023 was a year of rising mortgage costs and a slight decrease in demand that led to house price growth slowing, or even reversing in some areas. While the major markets like the North West and the West Midlands continued to grow in spite of national trends, many were worried about a longer downturn.
Data from Nationwide shows that this is no longer the case, with house prices growing on an annual basis for the first time in a year. While house prices are still 3% below the record highs of 2022, they grew a total of 1.2% since January 2023 – and that is a good sign for the future.
Robert Gardner, chief economist at Nationwide, said: ““The decline in borrowing costs around the turn of the year appears to have prompted an uptick in the housing market.”
Mortgages are now available at 4% for a five-year fixed rate which is a lot lower than the 2023 peak of more than 6.6%. Combine that with the fact that even after all the uncertainty of last year prices are just 3% lower than the all time peak, and it points to a positive future for property owners.
Backing up this view, research from Rightmove shows that new seller asking prices have gone up by 0.9% year-on-year. This suggests that overall market momentum is increasing.
Tim Bannister, Rightmove’s director of property science, says: “Mortgage rates have fallen considerably from their peak and are now remaining broadly stable after the uncertainty of late 2022 and 2023. Momentum to move in 2024 is continuing to build.”
Rental market growth slowing, but still high
With the housing market picking up speed, it is to be expected that the runaway rental growth seen in recent years is showing signs of slowing down.
Zoopla reports that average rental growth has fallen to 7.8%, down from 11% a year ago. This is the worst rate in two years, but perspective must be applied to the situation. The average rent is now £1,223 pcm and rents are still growing at almost 8%.
In the busiest markets such as Manchester, rents are still increasing at rates as high as 15% for the most popular city centre apartments types, and all types of apartments are still growing strongly.
As always, the main thing is the market you are looking at. Any concerns about falling rental growth rates – despite the fact that they are still high – can be met with data from busy markets with a significant supply and demand imbalance.
Overall, Zoopla reports that there are still 28% fewer homes on the rental market than there were in 2019 before the Covid-19 pandemic. With construction rates still low across the country, and with that situation likely to continue for years to come, the lack of supply is the main fact that property investors need to bear in mind when looking at rental growth statistics.
As we enter Q2 2024, the UK property market continues its unbroken run as a great place to invest or buy property as an owner-occupier.
Want to learn more about the UK property market and how you can invest in UK property? Get in touch with the team today.
