The recent data released by the Office for National Statistics (ONS) has shed light on the state of the UK housing market, revealing some significant trends in house prices and rental costs.

After a period of decline, the UK housing market has shown signs of recovery with an average increase of 1.8% in house prices over the 12 months leading to March 2024, bringing the average house price up to £283,000. This marks a significant turnaround from the 0.2% decrease observed in the previous year up to February 2024. This is the first annual increase since June 2023.

Here’s how the increases were distributed across the UK:

• England saw house prices rise to £299,000, a 1.0% increase.
• In Wales, prices went up by 1.3%, reaching £214,000.
• Scotland reported a notable 6.7% increase, with prices at £192,000.
• Northern Ireland experienced a robust 4.0% increase, with the average house price at £178,000 for the first quarter of the year.

Rental Market Dynamics

Alongside house prices, the rental sector has also seen significant activity. The average UK private rents increased by 8.9% in the 12 months leading to April 2024. Although this represents a slight decrease from the 9.2% high in March 2024, it indicates a slowing of rent inflation which had been climbing since December 2023.

Insights from Industry Experts

Economic Implications and Market Confidence

Speaking to Property Industry Eye, Nathan Emerson, CEO of Propertymark, emphasised the importance of the housing market as an economic indicator. He noted the uplift in the housing sector as a positive sign of broader economic health. With inflation decreasing, there is hope that the Bank of England might lower its base rate, potentially leading to more competitive mortgage deals. However, Emerson also pointed out the ongoing challenges for renters and the pressures on landlords that could affect the quality and availability of rental properties.

Optimism Among Real Estate Professionals

Emma Cox, MD of real estate at Shawbrook, highlighted the optimism in the market with the arrival of spring. She mentioned that professional landlords are adjusting their strategies to cope with economic uncertainties and are exploring various high-yield investment opportunities like Houses in Multiple Occupation (HMO) and semi-commercial properties.

Market Resilience and First-Time Buyers

Malcom Webb, technical director at Legal & General Surveying Services, discussed the resilience of the market despite challenges. There has been a notable increase in first-time buyers, particularly among younger age groups, reflecting strong demand across the market.

Mortgage Market Trends

Richard Harrison, head of mortgages at Atom bank, pointed out the increase in house prices as a sign of returning confidence and a robust demand, reflected in the number of sales and higher asking prices. He emphasised the importance of inclusive lending practices, especially for those with less-than-perfect credit histories.

Anticipations for Future Interest Rate Adjustments

Steve Griffiths, chief commercial officer at The Mortgage Lender, spoke about the ongoing demand in the housing market despite stable interest rates. He anticipates further positive developments if the Bank of England adjusts the base rate in the coming months.