House prices in the UK recorded an annual increase of 2.7% in June 2024, according to the latest figures from the Office for National Statistics (ONS).
On a monthly basis, prices edged up by just 0.5% from May, marking the fourth consecutive month of price rises after eight months of annual declines. This brings the average property value in the UK to £288,000.
The ONS data, which is based on Land Registry information from sold properties, highlights regional variations in property values across the UK.
England recorded a 2.4% annual increase, with the average house price now at £305,000. Scotland outpaced this with a 4.3% rise, bringing the average property value to £192,000. In Wales, prices saw a more modest growth of 1.8%, with the average home now valued at £216,000. Northern Ireland led the way with the highest annual increase, showing a 6.4% rise in the year to June 2024, pushing average property prices to £185,000.
Among the English regions, Yorkshire and the Humber saw the highest annual house price inflation at 4.7%, with the average home valued at £215,347. In contrast, London, which has the highest average property values at £523,134, recorded the lowest annual price inflation of just 1.2%.
Meanwhile, private rents in Great Britain increased by 8.6% in the 12 months to July 2024, maintaining the same growth rate as in June and remaining close to the record annual rise of 9.2% seen in March.
London experienced the highest rent inflation at 9.7%, raising the average rent in the capital to £2,114 per month. The North East saw the lowest rent increase at 6.1%.
Commenting on the figures, Nathan Emerson, CEO at Propertymark, said: “It is positive to witness further growth within the housing market despite some of the uncertainties consumers have faced this year. Across the coming months, we should start to see a greater level of affordability and confidence return, as the rate of inflation remains within the initially targeted range and with interest rates now taking their first steps to a controlled pathway downwards.
“It is essential we start to see the pledge of near two million homes promised by the UK government across the next five years turn into a firm reality.
“There is currently an enormous pressure on supply; however, there must be an extreme consideration to ensuring new homes are built in the right areas, with the right infrastructure at the right moment in time.”
Emerson added: “New housing developments ideally need to enhance urban areas already available, making full use of land such as derelict industrial sites before turning to greenbelt locations.”
On the rental figures, Emerson said: “The rental market continues to feel the harsh reality of ongoing pressures on housing demand, which are outstripping current supply. This has a real-world effect on rental prices for consumers and that consequence is prices tend to be pushed further upwards.
“It is crucial the mismatch between supply and demand is addressed as a priority to help ease a current ‘nine applications per available property’ trend that we are witnessing. It’s an unhealthy situation and one that can only be solved by ensuring long term investment in a diverse mix of sustainable housing to keep pace with growing demand.”
More reaction:
‘Welcome buy-to-let news’
Emma Cox, managing director of Real Estate at Shawbrook, said:
“The increase in house prices will be welcome news in the professional buy to let market. Landlords are showing optimism for the remainder of the year, bolstered by the recent base rate cut. This move has reassured property investors, instilling confidence in the long-term economic outlook and encouraging further market activity.
“Additionally, the government’s renewed focus on revitalising the construction sector – through ambitious housebuilding targets and more efficient planning processes – should help to boost the supply of high-quality rental stock, which is a positive development for the market.”
‘Turning point reached’
Tom Bill, head of UK residential research at Knight Frank, said:
“It has been a sluggish two years for the UK housing market as interest rates returned to normality but August may prove to be a turning point.
“The first rate cut in more than four years and lower-than-expected inflation numbers should boost demand this autumn and we expect average prices to rise by 3% in 2024.
“Rental value growth remains high by historical standards after a number of landlords sold up in recent years due to a proliferation of red tape and tax.
“Just as there are signs that supply is recovering and the upwards pressure on rents is easing, there is renewed uncertainty surrounding further legislative changes by the new government.
“If any new rules are too punitive for landlords, it could push rents higher as more sell up.”
‘Prices to fall in long term’
Mobeen Akram, new homes director, Mortgage Advice Bureau, said:
“The latest UK HPI announcement, coupled with the 5% base rate, is certainly a welcome relief for those who have been waiting for positive change in the housing market. Though this reduction is good news, we may still experience a slow market over the next while, as we move through the natural summer lull.
“Inflation having increased at 2.2% isn’t entirely unexpected either, as the market continues to find its feet after a turbulent couple of years. Subsequently, we’ve seen a monthly change of 4.4% in average new build prices, and 0.4% for existing properties.
“Longer-term, however, we can still expect house prices to start falling. We’d hope to start seeing wages outpace inflation, which would mean that affordability would improve for first time buyers. Nevertheless, we’re unlikely to witness a drop in the number of first time buyer numbers during 2024, which is positive for the market.”