Market report May 2024 – no signs of a spring bounce

Housing market activity has picked up a little, but prices are still moving sideways. Meanwhile, rental growth is still high for now, but seems to be slowing down.

• Zoopla’s House Price Index for March 2024 found increased sales market activity: sales agreed are up 12% year-on-year, and the property platform now projects that there will be 10% more completed sales in 2024 than in 2023. However, increased demand hasn’t yet translated into rising prices. The average house price sat at £264,500, 0.2% less than a year earlier (although up £300 compared to February). Prices have now been basically flat since September 2022.
• Nationwide found that prices rose 0.6% year on year in April, below the 1.6% recorded in March. Average house prices also fell a seasonally adjusted 0.4% month to month, resulting in an average April price of £261,962.
• Halifax reported higher growth in April, finding that prices rose 1.1% year on year. According to their House Price Index, the average home cost £288,949, 0.1% more than in March.
• Industry experts say that high interest rates and living costs are holding back housing demand, which is also backed up by a Nationwide survey of prospective buyers. Commercial lenders have increased their interest rates in recent weeks.
• Estate agents are divided. Tom Bill, head of residential research at leading estate agency Knight Frank, says there has been little if any spring bounce. But some agents on the ground report stronger increases in demand.
• The rental market also looks subdued, according to Propertymark’s latest agent survey. Tenant demand fell slightly from February to March (although it is still well ahead of supply), and the average number of new tenancies agreed is also down year on year.
• Rental growth is still holding up, measuring 7.2% year on year according to Zoopla. It is nevertheless the lowest increase recorded in the last two years. The average UK rent is now £1,223 per month.