HOUSE PRICES UPDATE: “We’re in a lot better place than last year”
The housing market is proving to be much more robust compared to last year, reports property analyst, Kate Faulkner.
Prices continue to be fairly flat nationally across the housing market, but most indices bar E.surv are reporting slight rises year on year – so the property market is in a lot better place this year than last.
It’s easy to forget how amazing the market has performed, even with the falls and downturn in sales in 2023, to recover so quickly this year when rates have moved from such a low base – to a high one, although a long term average one – the market has proved to be hugely robust compared to previous years.
‘High to low’ analysis of property price falls 22-23
Up until now we’ve only reported on the falls from the last recession during the credit crunch. However, now we have the falls from last year reported from the high to the low – with average falls ranging from 2.1% according to Zoopla and as high as 6.5% from Nationwide.
This is an interesting comparison as I believe if it wasn’t for the fact that 50%+ homes are owned without a mortgage and without the changes to affordability, including moving FTBs onto repayment, we would have seen the double-digit percentage falls last year and spent some years waiting for prices to recover.
Property price and market indices headlines:
Rightmove – Market maintains momentum despite more tentative top-end
“The average price of property coming to the market for sale drops by just £21 this month (0.0%) to £375,110 after reaching a record high in May, as prices in June follow their familiar seasonal pattern of recent years and remain flat.”
Home.co.uk – High borrowing costs risk stalling the market
“Asking prices have risen 0.5% since last month across England and Wales (the fifth consecutive monthly rise) and are up just 0.5% compared to June 2023.”
RICS – Current conditions remain subdued but the market is expected to regain some impetus in the months ahead
“While the recent picture for house prices has remained somewhat negative across much of the UK, it is particularly noteworthy that near term price expectations stabilised during the latest survey round.”
Nationwide – House price growth broadly stable in June
“UK house prices up 1.5% in June compared with a year ago.”
Halifax – UK house prices remained stable in June
“Average house prices largely flat in June, down by just -0.2% on a monthly basis.”
E.surv – Housing market builds positive momentum
“Prices are just 1.6% lower than a year ago.”
Zoopla – Is the housing market entering a seasonal slowdown?
“UK house prices unchanged over the last 12 months.”
Summary of the insights from this month’s indices:
– The majority of buyers and sellers have continued their plans since the election was called, with the only sign of election caution being a slight drop in the number of new sellers especially at the typically more discretionary top-end of the market:
– Over the last four weeks, the number of sales being agreed has stayed steady at 6% higher than a year ago.
– Buyer demand is now 5% higher than last year.
– In the two weeks since the surprise election announcement, the number of top-end sellers coming to market is 3% lower than a year ago, versus being 11% higher in the previous two-week period.
– The average 5-year fixed mortgage rate is now 5.04%, compared with 4.94% in January.
– Demand +6% and sales agreed +8% – both higher than last year.
– 75% of the 1.1m sales projected for this year are either complete or in the sales pipeline.
– UK house prices on track to be 1.5% higher over 2024.
– We calculate UK house prices are currently 8% ‘over-valued’ and by end of 2024 prices will be ‘fairly valued’.
We calculate UK house prices are currently 8% ‘over-valued’ and by end of 2024 prices will be ‘fairly valued’”
This chart from Zoopla shows their opinion on whether the housing market is over or undervalued – glad I have mostly bought during the ‘under-valued’ periods!
– UK house prices edged up by 0.2% in June, after taking account of seasonal effects. This resulted in the annual rate of growth rising from 1.3% in May to 1.5% in June, leaving prices around 3% below the all-time high recorded in the summer of 2022.
– Housing market activity has been broadly flat over the last year, with the total number of transactions down by around 15% compared with 2019 levels.
– The total number of new instructions entering the market during May 2024 was 14% more than during May 2023.
– Typical Time on Market (median) for unsold property in England and Wales being seven days less than in June 2019. However, the current median is four days more than in June last year.
– Prices are now within 5% of the previous peak reached in October 2022. June’s 1.6% decrease was a full percentage point improvement on May and the strongest performance since July 2023.
