UK PROPERTY MARKET update: may 2024
June 5, 2024
May has certainly been an eventful month, in the last few weeks we’ve seen tons of positive news spilling out about the state of the UK property market that not even the snap announcement of a UK general election could dampen!
MAY on the move
House prices up 0.4% month on month according to Nationwide
Asking prices up 0.8% month on month according to Rightmove
20% more homes on the market this May than last year
Sales agreed up 17% on last year (date comparing Jan-April 2023 & 2024)
Latest inflation figures lower than expected; 2.3% in April compared to 3.2% in March
Savills, JLL and other major agencies increasing growth rates on UK house price and rental forecasts THIS YEAR and for the next five
Major lenders slashing interest rates on mortgage products
Widespread speculation of a Bank of England base rate decrease at the end of June
What does all this mean?
Rising consumer confidence, rising wages and cooling inflation have provided a shot in the arm for the property market encouraging sellers and buyers back onto the market. What we’re seeing at the moment is the start of another house price rise curve. Savills, who in November last year predicted negative growth for UK average house prices, changed their forecast to predict 2.5% price growth in 2024 alone, whilst JLL changed its annual forecast from a retraction in prices to a 2% gain and a 4.5% rise in rents. For more detail on the agencies’ turnarounds read our recent blog here.
All eyes are now on the Bank of England, with widespread speculation – including from a few bank insiders too – that the Money Policy Committee will vote to lower the Base Rate at its next meeting on 20th June.
Bank of England, UK
Where should UK property investors be buying?
This might be the wrong question to both ask and answer for it’s not so much where as when. Buying off-plan now ensures you a more advantageous purchase price before the supply and demand situation of UK new build sends prices sharply upwards again and also mitigates higher lending rates in the hope that by the time the development has completed, the rates will be lower. Predictions of nearly a 30% rise in house prices in the North West by 2028 (Savills) give you an idea of just how steep the curve is being plotted.
Elsewhere, the West Midlands is also showing great current potential value for money with strong growth potential.
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The new build market is its own market
Over the last two years we’ve witnessed the newbuild market as its own market, largely insulated from the price fluctuations we’ve seen in the general housing market. We expect prices to start to rise steeply in new build homes, be they houses or apartments, as the effects of the stilted UK planning pipeline take hold. As we’ve reported earlier this year, stock delivery is at an all-time low and now we’re seeing buyers spill back onto the market, competition for available new build properties is set to increase. We encourage all of our investors who are thinking about purchasing a UK property to engage in purchases sooner rather than later. As ever, the team are always happy to talk you through the different options we have. Perhaps you have children starting university in the UK – and buying a flat that they can live in (and potentially rent to friends) can be a good way to offset the increasing cost of UK rental accommodation. We have a number of developments in key university cities such as Manchester and Birmingham and of course, London.
All that to say – don’t hesitate to contact us. We’re happy to share case studies and cash flows to give you the complete picture on making an investment property purchase.
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about the AUTHOR
Managing Director
richard bradstock
RPA’s founder, Richard has worked in residential development investment for 20 years and oversees the general running of the business ensuring the RPA Group retains true to its founding principles. Over his career Richard has built an incredible network of international property investors and like-minded industry professionals. The RPA Group was born out of a duty of care to provide property investors with an industry-leading and integral service, one that connects investors with quality and desirable investment opportunities, whilst providing reliable and trustworthy market commentary and analysis alongside, enabling investors to make the best, most-educated decisions for them.