House prices across the UK have risen by 1.1% in the year to April, with the average house price now standing at £281,000, making it even harder for those hoping to jump on the housing ladder.
The Office for National Statistics said average house prices rose by 1.1% in the 12 months to April, up from 0.9% in March. Average private rents climbed by 8.7% in May, down from 8.9% in April.
It was the second month in a row with an annual increase in prices, following eight months of annual falls in prices.
In the 12 months to April 2024, average house prices increased in England to £298,000 (a 0.6% annual rise), in Wales to £208,000 (up 0.4%) and in Scotland to £190,000 (up 4.5%).
Average house prices increased by 4% annually to £178,000 in Northern Ireland.
SPRING SQUASHED
Tom Bill, Knight FrankTom Bill, head of UK residential research at Knight Frank, says: “House price growth this spring has effectively been squashed by rising mortgages rates and the fact supply is growing faster than demand.
“Higher-than-expected services inflation today will only increase downwards pressure on prices, with the first rate cut not expected for another four months.
“That said, demand per listing has rarely been lower in recent years, which means buyers who do their homework may find themselves in an advantageous position.”
And he adds: “Rental value growth is decelerating but still high by historical standards.
“The scrapping of the Renter’s (Reform) Bill ahead of the election is prolonging a sense of limbo for landlords, some of whom will sell up if any future legislation is too punitive.
“That would increase upwards pressure on rents again and any future government needs to be wary of economically self-defeating rule changes.”
MODEST BOUNCE
Nick Leeming, Jackson-StopsNick Leeming, Chairman of Jackson-Stops, says: “Today’s data reveals a modest Spring bounce, with house prices increasing slightly across the UK.
“While slight, the price growth demonstrates that the UK’s housing market remains competitive, despite higher mortgage rates and economic headwinds. Buyers appear undeterred, likely spurred by lifestyle factors, job changes, and the desire to lock in purchases ahead of potential further price appreciation down the line.
“Despite gloomy weather so far this year, vendors are still driven to get their homes on the market. At Jackson-Stops, we’ve witnessed this momentum firsthand with an 18% uptick in new property listings hitting the market, as vendors look to take advantage of robust buyer demand.
“The expanding inventory provides much-needed supply for buyers who have been hampered by limited choices over the past few years and signals a step-change in the market – vendors now need to be competitive with their listing price to standout.”
POLITICAL CHANGE
He adds: “It’s worth noting that the general election had not yet been announced during this period, so next month’s figures will reflect the impact of political change.
“However, early indicators from the Jackson-Stops network suggest that the election has had little impact on buyer and vendor sentiment. Life’s pivotal moments continue to drive housing transactions regardless of the political climate. The “must-move” market persists, while activity at the higher end has gained momentum.”
OPPORTUNITY
Iain Mckenzie, The Guild of Proeprty PorfessionalsIain McKenzie, Chief Executive at The Guild of Proeprty Porfessionals, adds: “Modest but healthy levels of growth seems to be the picture of house prices currently, bringing some much-needed stability to the property market.
“This period of calm is an opportunity for both buyers and sellers alike. Sellers can benefit from continued strong buyer demand, while a more balanced market may offer better value for buyers, particularly those looking to own their first home.
“There are clear differences on a regional basis, with areas like the North West seeing strong growth of nearly 4%, compared with London’s decrease by a similar amount.
“While mortgage approvals dipped slightly in April, the overall number of transactions remains higher year-on-year, suggesting a market with continued momentum.
“The next government needs to work together with industry stakeholders to address the ongoing challenges facing the industry. Policies that increase housing supply, enhance affordability, and promote transparency will benefit buyers, sellers and estate agents.
“The Guild remains cautiously optimistic about the outlook of the housing market for the remainder of the year. Strong buyer demand, alongside a slowdown in house price volatility, will help to keep the industry seeing robust growth.”
STRONGER POSITION
Jason Tebb, OnTheMarketJason Tebb, President of OnTheMarket, says: “Property prices and transactions continue to pick up month-on-month, with buyers and sellers alike appearing relatively unconcerned about the impending election.
“Our data shows that seller sentiment remains steady, while buyer confidence has improved significantly, with the latter finding themselves in a stronger position as more stock becomes available. Inflation hitting its 2 per cent target should boost that confidence further, fuelling hopes that the Bank of England will cut rates by the end of the summer.
“However, affordability constraints remain an issue for borrowers after many rates rises over the past couple of years, with buyers negotiating hard on price. Sellers should take advice from their local agent and price accordingly if they wish to take advantage of the uptick in activity and interest.”
HEATING UP
Malcolm Webb, Legal General Surveying ServicesMalcolm Webb, Technical Director, Legal & General Surveying Services, says: “While we wait for the sun to make an appearance, it is encouraging to see the mortgage market heating up.
“Inflation has met the 2% target, and despite tangible affordability challenges, we are still seeing strong demand across the board, particularly from first-time buyers. But make no mistake – in the current market, getting independent expert advice is the best way to filter out the noise and find the best product for your needs and circumstances.”
Andrew Montlake CorecoAndrew Montlake, Managing Director at national brokerage Coreco, adds: “Average annual house price growth of 1.1% shows the resilience of the property market and defies the doom-mongers.
“Inflation hitting the 2% target could transform the property market in the second half of the year.
“Even if Threadneedle Street leaves rates on hold tomorrow, which is the consensus, a cut is now coming and that may start feeing through into lender pricing. That in turn will boost demand for property and could see prices start to rise again.
“Despite the current General Election uncertainty, many in the property market will be quietly cautious as there is a huge amount of pent-up demand out there. Those who have been sitting on their hands could hit Rightmove in their droves if lenders start lowering rates. Whisper it only but things are starting to look a little more positive.”
