Property Market Update: September 2024

Welcome to the September edition of the Property Market Report! In this report, we bring you the latest insights and data from key property market players, offering a comprehensive analysis of the trends and factors shaping the UK housing market.

Mortgage market recovery

Following a positive summer for the housing market, optimism among new buyers is rising as interest rates begin to ease.

Mortgage approval rates reflect this renewed confidence, with the Bank of England reporting a 2.3% increase in approvals in July 2024, totalling 61,985 - a significant 26.5% increase compared to the same period in 2023.

As of September 4th 2024, Rightmove reports the following average mortgage rates:

• 2-year fixed rate: 5.72%
• 5-year fixed rate: 5.37%

According to Halifax, the average property price is now £292,505, just £1,000 shy of the record set in June 2022, providing welcome news for existing homeowners.

However, affordability remains a pressing challenge for many buyers adjusting to higher mortgage costs. Rightmove reports that despite positive trends, it may take further reductions in the Base Rate before buyers see substantial relief in mortgage rates.

While income growth is gradually improving purchasing power, buyers remain price-sensitive.

House prices on the rise

UK house prices have shown steady growth, with Halifax reporting a 0.3% rise in August and a year-on-year increase of 4.3%, their fastest rate since November 2022.

Northern Ireland leads the country in property price growth, seeing a 9.8% annual increase, bringing its average house price to £201,043. Zoopla forecasts UK house prices will rise by 2.5% by the end of 2024, with 1.1 million sales anticipated.

Over the first seven months of 2024, house prices have increased by 1.4%, setting a positive trend for the remainder of the year.

Asking prices: a seasonal adjustment

New seller asking prices have seen a seasonal drop of 1.5% this month, according to Rightmove. 1 in 5 homes have had their asking price cut by 5% or more in an effort to attract buyers, reflecting continued sensitivity to pricing.

Homes requiring an asking price reduction are taking more than twice as long to sell compared to those priced correctly from the outset. Sellers are encouraged to price realistically to secure timely sales.

Market activity is strong and stable

The broader housing market has shown resilience, with key activity indicators improving year-on-year. The Royal Institution of Chartered Surveyors (RICS) reports a stabilisation in buyer enquiries and agreed sales, while new instructions have returned to positive territory.

The recent Base Rate cut has spurred a further upturn in market activity, but its impact on easing mortgage rates has been limited thus far.

According to Zoopla, housing market activity is stronger than last year, with buyer demand 19% higher in August 2024 compared to the same period in 2023.

Estate agents have also seen an increase in stock, with an average of 33 homes per agent - the highest level in seven years. This rise in housing supply is giving buyers more choice, keeping house price inflation in check.

Buyer and seller dynamics

Buyer demand continues to grow, with estate agents reporting a 19% increase in potential buyers contacting them since the start of August. However, buyers remain cautious, with many still adjusting to higher mortgage costs.

On the seller side, new listings are 5% ahead of last year, signalling growing confidence among homeowners looking to move.

Summary: Onwards and upwards?

As we move into the final quarter of 2024, the UK property market is on track to see further growth in house prices and sales, though affordability challenges persist.

With more housing stock available and the prospect of further rate cuts, both buyers and sellers will be keeping a close eye on market developments as we approach the final rung of the year.