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UK house prices rose for a second consecutive month in April, according to the latest official figures, as the housing market shows signs of recovery amid improving economic conditions.
The average house price in the UK rose 1.1% in the 12 months to April, according to provisional estimates from the Office for National Statistics (ONS).
The figure accelerated from an annual increase of 0.9% in the year to March and marked the second consecutive monthly annual increase after eight consecutive months of declines.
Housing market sentiment has shown signs of improvement this year, despite mortgage rates remaining high and the Bank of England continuing to keep rates steady at 5.25%.
Separate data from the ONS yesterday revealed that inflation returned to the government’s 2% target in May for the first time since July 2021.
However, the central bank is expected to wait until at least August before cutting interest rates, with its next meeting scheduled for this morning.
According to the ONS, house prices rose 0.6% in England, 0.4% in Wales and 4.5% in Scotland in the 12 months to April.
The data showed average private rents in England rose 8.7% in the 12 months to May, slowing from an 8.9% rise in April after a 9.2% rise in March.
Industry response:
Jason Tebb, President of OnTheMarket, commented: “Property prices and transactions continue to rise month on month, with buyers and sellers appearing relatively unconcerned about the impending election.”
Our data shows that seller sentiment is stable, while buyer confidence has improved significantly, putting them in a stronger position as inventory builds up. If inflation reaches its 2% target, that confidence will increase further, raising hopes that the Bank of England will cut interest rates by the end of the summer.
“However, many of the interest rate increases over the past few years have buyers negotiating hard on price, and limited availability remains an issue for borrowers. Sellers should seek advice from their local real estate agents and price accordingly if they want to take advantage of the increased activity and interest.”
Ian Mackenzie, CEO of the Guild of Property Professionals, said: “House prices currently appear to be at a modest but healthy level of growth, bringing much-needed stability to the real estate market.”
“These calmer times present opportunities for both buyers and sellers. Sellers can benefit from continued strong buyer demand, while a more balanced market may offer better value for buyers, particularly those looking to purchase their first home.”
“There are clear regional differences, with areas such as the North West seeing larger increases of nearly 4%, while London has seen a similar decrease.
“While mortgage approvals fell slightly in April, overall transaction volumes increased year-on-year, signaling continued market momentum.
“The next administration should work with industry stakeholders to address the ongoing challenges facing the industry. Policies that increase housing supply, improve housing affordability and promote transparency will benefit buyers, sellers and real estate agents.”
“The Guild remains cautiously optimistic about the housing market outlook for the remainder of the year. Moderating house price volatility combined with strong buyer demand will contribute to continued solid growth in the housing sector.”
Nicky Stevenson, managing director of Fine & Country, said: “The weather was blamed for April’s slowdown, but the rain did not discourage buyers and home prices remained strong.
“After many buyers put their home buying plans on hold towards the end of 2023, stable interest rates and the prospect of rate cuts this summer were enough to give many confidence to decide to make a move.
“Transaction volumes in April were up 10% compared to the same month last year, signalling a recovery in the property market as financial pressures on households ease.
“Meanwhile, reports this morning indicate that the Consumer Price Index came in at 2% in May, in line with the government’s inflation target.
“We expect economic conditions to continue to improve and we are likely to see a surge in activity as the year progresses, particularly with a rate cut by the Bank of England on the horizon.”
“This will have a positive impact on homebuyers by making mortgages more affordable, increasing consumer purchasing power and making it easier to acquire the property they want.”
Nick Leeming, chairman of Jackson Stops, said: “Today’s data points to a gradual spring recovery, with house prices rising slightly across the UK. Although small, the price increase demonstrates that the UK housing market remains competitive despite rising mortgage rates and economic headwinds. Buyers do not appear to be deterred. We believe lifestyle factors, job changes and a desire to lock in a purchase in preparation for the potential for further price growth in the future are fuelling buyer activity.”
“Despite the gloomy weather so far this year, sellers remain eager to put their homes on the market. At Jackson Stops, we’ve witnessed this momentum firsthand with an 18% increase in new listings coming to market as sellers look to capitalize on strong buyer demand. The expansion of inventory signals a major shift in the market, providing much-needed supply for buyers who have had limited options for the past few years. Sellers now need to be competitive with their asking price in order to stand out.
“Jackson Stops’ regional hotspots of Chipping Campden, Midhurst and Sevenoaks have seen a significant increase in enquiries from new buyers, demonstrating growing demand for homes in popular commuter towns and regional centres across England.
“It’s worth noting that the general election had not yet been announced during this period, so next month’s figures will reflect the impact of political shifts. However, early indicators from the Jackson Stops network suggest that the election is having little impact on buyer and seller sentiment. Important life moments continue to drive home transactions regardless of the political climate. The ‘must move’ market persists and luxury home activity is gaining momentum.”
Nathan Emerson, CEO of Propertymark, said: “The effects of the tough economic situation continue to cause disruption for many renters, with many people’s personal finances stretched to the limit, plus the uncertainty of the general election and what it ultimately means for renters and landlords. All major political parties have cited the need to build much-needed new housing, but there need to be precise plans and timelines as to how and when this will happen. Demand currently continues to significantly outstrip supply, which is a major factor in rising rental prices across the board.”
Malcolm Webb, technical director at Legal & General Surveying Services, added: “This is a game changer for the industry. “While we wait for the sun to peek out, it’s encouraging to see that the mortgage market is thriving. Inflation is hitting its 2% target and while home buying is clearly challenging, we’re still seeing strong demand across the board, particularly from first-time homebuyers. But make no mistake – in the current market, getting independent expert advice is the best way to cut through the noise and find the product that best suits your needs and circumstances.”