UK Housing Market Update – July 2024
Overview of Current Market Conditions
The UK housing market has shown modest growth in June 2024, with a nationwide house price increase of 0.2%, culminating in an annual growth rate of 1.5%. This growth is underscored by significant regional variations; particularly, the northern markets have experienced noticeable growth compared to the Southern regions which are lagging slightly behind.
A noticeable trend in the rental sector shows an increase in rates across the country, driven by high demand and a constrained supply, especially in major urban centers. This dynamic has led to an annual upsurge in rental costs, affecting affordability and availability.
Supply Dynamics and Market Movements
The supply of available homes has increased significantly, with a 20% rise compared to the previous year. This upturn has brought the average number of homes per agent to 31, the highest recorded in the last eight years. Despite a recovery in sales volumes, which saw a 13% increase from last year, the market remains well-supplied, offering more choices for potential buyers.
Moreover, regional supply variations have become more pronounced. For instance, the South West of England has reported a 33% increase in the number of homes for sale. This surge is influenced partly by recent tax adjustments for holiday lets and potential council tax increases for second homes.
Market Outlook Amid Political Changes
The announcement of the general election scheduled for July 4, 2024, has injected a measure of uncertainty into the market. While this event is likely to cause a temporary slowdown in market activity, individuals already in the process of purchasing homes are expected to continue with their transactions, aiming to secure property ownership despite potential political upheavals.
Looking ahead, the UK property market faces several long-term challenges, such as the high house price to earnings ratio and demographic shifts, including an increase in young adults living at home. These factors necessitate a strategic approach to housing policy, focusing on both supply increase and significant reforms within the private rental sector to ensure long-term stability and accessibility of housing in the UK.
