UK House Prices 2024 Continue to Climb.
What This Means for Buyers and Homeowners in 2024? The UK housing market has seen another rise in house prices, marking the sixth month of growth. According to the latest Office for National Statistics (ONS) figures, the average UK house price reached £293,000 in the year to August 2024. This represents a 2.8% increase from last year’s period, up from a 1.8% rise in July.
This sustained growth is a significant turnaround after the housing market experienced eight months of declining prices earlier in the year. For buyers, homeowners, and investors, these trends present challenges and opportunities as we move through the final quarter 2024.
Regional Variations in House Price Increases
UK house price 2024 increases have been felt across the UK, though the pace of growth varies by region. England saw average house prices rise by 2.3%, bringing the typical home price to £310,000. This marks an increase from July’s 1.3% growth, showing renewed strength in the market.
Wales experienced a more substantial surge, with prices rising 3.5% to £223,000, compared to a 1.5% increase the previous month. Scotland also saw notable growth, with a 5.4% rise in house prices, bringing the average home to £200,000, up from 5% in July. Northern Ireland outpaced the rest of the UK, with prices jumping 6.4% to £185,000 in the second quarter of 2024.
What’s Driving the Rise in House Prices?
Several factors are driving the rise in house prices and contributing to this sustained increase. First, inflation has dropped to its lowest level in three years, at just 1.7%. This easing of inflation has helped alleviate some financial pressures on households and businesses, boosting confidence in the housing market.
Secondly, there’s been a significant increase in housing market activity. Data from Rightmove reveals that the number of agreed home sales is up 25% compared to last year. After a period of hesitation, many buyers who had paused their plans have re-entered the market, seizing the opportunity to move or invest. Sellers are equally confident, with a 14% increase in new listings compared to 2023. Estate agents report the highest stock levels since 2014, creating a busier and more competitive market.
How Are Mortgage Rates Affecting the Market?
Over the past year, one of the biggest challenges for buyers has been rising mortgage rates. As the Bank of England increased its base rate to combat inflation, borrowing became more expensive, pricing many would-be buyers out of the market.
However, we are seeing some relief in mortgage rates, likely encouraging more buyer activity in the coming months. Earlier this year, average mortgage rates hovered around 5.8% to 5.9%, significantly strained affordability. However, with inflation easing and the Bank of England expected to cut its base rate in November, mortgage rates have started to dip.
Currently, many lenders offer deals starting in the 4% range. This is a welcome change for buyers, particularly first-time buyers, who were previously struggling with affordability. Although rates are still higher than the ultra-low levels we saw during the pandemic, the shift to more manageable rates is a positive sign for the market.
Opportunities for Homeowners and Landlords
Rising property prices are beneficial not just for buyers—homeowners looking to remortgage or raise capital on their property can also benefit. With increased home equity due to higher house prices, homeowners can remortgage and potentially release capital.
For landlords, the higher property values allow them to increase their mortgages on buy-to-let properties. This additional capital could be used to expand their portfolio or improve existing rental properties, making their investments more profitable in the long run.
Additionally, there’s another potential benefit for existing homeowners who are remortgaging on a like-for-like basis. Thanks to the increase in house prices, many may find themselves in a lower loan-to-value (LTV) bracket, which could give them access to more favourable mortgage rates. This shift can result in significant savings, with some homeowners potentially saving thousands of pounds by securing a better deal. For many, this could mean locking in a lower monthly repayments.
What Does This Mean for Buyers and Homeowners?
While house prices are still rising, combining a more active market and improving mortgage rates presents an opportunity for buyers and homeowners alike. The next few months could be crucial for those looking to purchase or remortgage, particularly as experts expect further rate cuts from the Bank of England in 2024.
The easing of mortgage rates is especially encouraging for first-time buyers. More competitive products on the market—some offering up to six times your income—are helping many people finally get a foothold on the property ladder. Meanwhile, existing homeowners and landlords can remortgage, take advantage of lower LTV brackets, and capitalise on increased equity to secure better financial deals.
At Pinpoint Finance, we know navigating the housing market can be challenging, especially with shifting rates and fluctuating prices. Whether you’re a first-time buyer, looking to remortgage, or seeking to invest in a buy-to-let property, our team of expert brokers is here to guide you through every step of the process.
Conclusion
The UK housing market remains strong as we approach the final months of 2024. House prices are continuing to rise, and with mortgage rates starting to ease, there are opportunities for both buyers and homeowners. With the proper guidance and financial planning, now could be the ideal time to make your move or secure a more favourable mortgage deal.
If you’re considering purchasing a home, remortgaging, or expanding your property portfolio, Pinpoint Finance can help.
Our team is ready to help you find the best mortgage deals and support you in making informed decisions about your future.
