Positive outlook for UK property prices – May 2024
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House prices in the UK remained steady in April as the market continues to progress following the challenges of 2023.
The latest figures from Halifax show that on an annual basis, the average house price rose 1.1% last month, following 0.4% growth in March.
Amanda Bryden, the head of mortgages at Halifax, said: “This reflects a housing market finding its feet in an era of higher interest rates. While borrowing costs remain more expensive than a few years ago, homebuyers are gaining confidence from a period of relative stability.”
Bryden added that activity and demand are up and mortgage approvals have reached their highest point in 18 months.
In other words, the UK housing market is in a good place right now. But what about the future?
New projections from Savills show that the market may be on the cusp of a period of sustained growth.
The agency had previously estimated we would see overall house price falls of 3% in 2024, however, the Savills research team have changed their mind.
Following the latest house price figures, Savills now believes that we will see overall growth of 2.5% this year and an average house price increase of £61,500 over the next five years.
This is a major positive change and it is based on borrowing costs and the Bank of England base rate coming down. It is also noted that the overall number of transactions is expected to rise this year to 1.05 million from initial predictions of 1.01 million.
Is this a good time to buy property in the UK?
Lucian Cook, the head of residential research at Savills, said: “The outlook for 2024 has improved since our last [November 2023] forecasts as mortgage costs have nudged down slightly and are much less volatile. The outlook for economic growth has also slightly improved, pointing to modest house price growth this year, with greater potential over the following few years.”
Firstly, it makes buying property off-plan the smart move. You can secure a property at today’s rates and enjoy the predicted house price growth over the course of construction. Rather than buying a property in a few years when prices have increased, you will already have a chunk of capital appreciation when the property completes.
If the analysis is correct and borrowing costs come down, you will also be able to benefit by choosing an off-plan property now. Rather than having to pay for a property at today’s higher rates, you pay the balance of the transaction when the property is complete in the future – meaning you will be paying below market value on a better rate.
Secondly, it means that regional city centre properties are likely to offer the best future value. Established city centre markets like Manchester, Birmingham, Sheffield and Bristol have outpaced national growth predictions for years. Add in the potential of up-and-coming hotspots like Preston and Wakefield, and you have a big opportunity to earn in excess of what Savills predicts for the next five-year cycle.
Want to buy off plan property in Manchester, Birmingham or other great locations? Discover our off-plan property for sale and get in touch with the team today.
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