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UK house prices hit record high



The average UK property house price reached a record high of £375,131 this month according to property analysts Rightmove, with the average prices of properties coming to market rising by 0.8% (£2,807) month on month.


With a long list of political, economic and social factors still influencing the market in 2024, we break down why house prices are continuing to rise.


What is the bond market?


According to Rightmove, the number of sales agreed during the first four months of 2024 was 17% higher than for the same period in 2023. One of the key drivers for growth this year is the activation of previous would-be buyers who did not pursue property plans last year and braved this year’s mortgage rates to pursue their ideal properties. Further proving the market's resilience is an impressive 12% increase in the number of new sellers entering the market, cementing a growing sense of trust in the economy.


Additionally, May has historically proven to be a strong time for price growth in the UK, and the month has seen new price records set in 12 of the previous 22 years. There are typically more properties on the market in spring as sellers emerge from winter and consider a change, and the market is generally more active once the weather starts to warm up and the clocks go forward.


What is driving the demand for UK housing?


An anticipated base rate cut is likely a reason influencing higher housing demand. Inflation is currently 3.2% and has continued to undershoot expectations. The Bank of England, which has maintained the base rate at 5.25%, anticipates inflation to fall below the 2% target, which could lead to more favourable conditions easing pressure on buyers.


Meanwhile mortgage approvals are at an 18-month high, suggesting a return to pre-pandemic activity. Additionally, rental growth across the UK remains historically high, with certain regions like Scotland, the North East, and Wales still exhibiting strong numbers. This upward trend in the rental market proves a sustained demand for rental properties, which can also influence the overall housing demand.


Which regions are experiencing the most activity?


Regionally there are variations in demand for UK property, but average asking prices have gone up in every area of the kingdom in May, with regions like the North East and the North West seeing the most growth.


The largest annual increase in asking prices is in the North East of England at 5.8%, with average asking prices in this region now at £190,158. Meanwhile, the North West boasts major cities like Manchester and Liverpool and is fast becoming the country’s property investment hotspot thanks to booming business and tech markets, an increasingly young working demographic and a large student scene.


London has also experienced higher than average quarterly growth as the post-pandemic ‘race for space' slows down and buyers return to major cities.


Long term predictions for the UK property market


In November of last year Savills predicted that house prices would fall by an average of -3.0% in 2024, and that housing transactions would remain at around 1 million for the year.


Thanks to decreases in the cost of mortgage debt and increasing demand it now predicts that UK house prices are expected to rise by 2.5% this year, and Rightmove anticipates the number of completed house sales this year to reach around 1.1 million.



While UK property prices enjoy an upward trajectory there is ongoing uncertainty around future base rate cuts, a soft outlook for economic growth in 2024, and the looming general election which could impact health in the market and create a complex environment for the UK housing sector.


It is imperative for buyers and investors to enter the market with the guidance and expertise of a professional to help them navigate their personal and property goals with peace of mind and clarity. Get in touch today to find out more about our expert panel of property, finance, investment and tax professionals.

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