Market report March 2024 – signs of life in housing sector

New industry reports show the true scale of last year’s housing market slowdown, but there are some positive signs for 2024. Meanwhile, rents continue to rise regardless of sales market cycles.

• The average UK rent rose 8.3% year-on-year in February, says property portal Zoopla’s monthly market statistics. The average rented property now goes for £1,220 a month.
• Rents are rocketing in towns within commuting distance of major cities, according to Zoopla. Bolton, Wigan, Newport, Bradford, Rochdale and Luton were all among the top 10 areas for rental growth between 2020 and 2023, with increases of 33% and up in average rents.
• Housebuilders’ pre-tax profits crashed last year, according to newly released reports. Persimmon reported a fall of 52%, while Taylor Wimpey’s dropped by 48% – although this was less than either expected. Both companies expect construction to be subdued this year.
• Land Registry data shows that £154.7 billion of residential property was sold in England in 2023, 48% less than in 2022. The average house price fell by 2.1% nationwide, with London prices falling 4.8% on average.
• However, the housing market may be warming up as spring approaches. Rightmove reports that sales in the first six weeks of 2024 were up 16% year on year and above pre-pandemic levels.
• Inflation fell faster than expected in February, to 3.4%. Even so, the Bank of England kept interest rates unchanged at 5.25%, keeping borrowing costs at their highest level for 16 years.
• However, interest rates are still significantly above their medium-term average. A study by The Mortgage Lender found that nearly half of landlords will have to renew their mortgage within the next year, and they face an average payment increase of £615.