Property Market Update: November 2024

Welcome to the November edition of the Property Market Report! We've collated information from experts across the UK to provide you with a comprehensive view of the current market.

House prices continue to grow, albeit modestly

The latest data from major indices indicates steady growth in prices. Halifax reports an average UK house price of £293,999, with annual growth of 3.9% - though this represents a slight easing from September's 4.6% increase.

Nationwide's figures show a more conservative annual growth of 2.4%, down from 3.2% the previous month, with their average house price standing at £265,738. Meanwhile, Zoopla reports house price inflation turning positive at 1%, a significant improvement from -0.9% a year ago.

First-time buyers lead the way - but face new challenges

First-time buyers have emerged as the largest buying group in 2024, accounting for 36% of all sales according to Zoopla. They're followed by existing homeowners with mortgages (31%) and cash buyers (27%).

However, recent budget changes to Stamp Duty Land Tax (SDLT) will affect approximately one in five first-time buyers, with the greatest impact in the South East, where 40% of FTBs pay between £300,000 and £425,000 for their homes.

The Royal Institution of Chartered Surveyors (RICS) reports sustained buyer interest overall, with net buyer enquiries at +14%, broadly maintaining last month's positive momentum.

Meanwhile, the increased higher rate SDLT for additional dwellings (up 2% to 5%) will affect around 194,000 transactions, adding approximately £4,000 to typical buy-to-let purchase costs.

Mortgage market and market activity

The mortgage market continues to show signs of improvement, with approval rates reaching their highest levels in two years.

Bank of England figures reveal a 1.1% monthly increase in mortgage approvals to 65,647 in September - an impressive 49.3% higher than the previous year. Current average rates from Moneyfacts show two-year fixed deals at 5.42% and five-year fixes at 5.13%, though markets are now expecting a more gradual reduction in Bank of England rates than previously anticipated.

This positive mortgage environment has contributed to the most active market period since the 2020 boom. Zoopla reports the sales pipeline has reached £113 billion, a remarkable 30% increase from last year.

Currently, there are 306,000 homes with sales agreed progressing through the buying process. This surge in activity is further supported by Rightmove's data showing a 29% year-on-year increase in sales.

Housing stock and asking prices

The market is seeing its highest level of available housing stock per estate agent since 2014, with Rightmove reporting a 12% year-on-year increase. New seller asking prices have risen marginally by 0.3% to £371,958, notably below the typical seasonal increase of 1.3% for this time of year.

Rising living costs

In a challenging environment for household costs, Rightmove reports that the average annual energy bill for homes with an EPC rating of D has increased by 10% since September, now standing at £2,465. This increase in living costs, combined with the recent Stamp Duty changes, may influence buyers' decisions in the coming months.

Looking ahead

With robust sales activity, improving mortgage approval rates, and stabilising house prices, the market shows encouraging signs of recovery. However, the combined impact of recent Stamp Duty changes, rising energy costs, and a more conservative approach to interest rate reductions may influence market dynamics in the coming months.

Buyers and sellers alike should stay informed about these evolving conditions and seek estate agent advice when making property decisions.