UK house price falls are slowing down as rents rise at record pace (2024)

UK private rents surged 9.2% in the year ending March, a record high since UK data collection began in January 2015

UK house price falls are slowing down as rents rise at record pace (1)

The average UK house price fell by 0.2% in the year leading up to February, lessening from a decrease of 1.3% in the period leading up to January.

According to the Office for National Statistics (ONS), the average house price across the UK stood at £281,000. During the same period, the average house prices in England fell to £298,000 reflecting a 1.1% drop, decreased in Wales to £211,000 marking a 1.2% decline, while they climbed in Scotland to reach £188,000, an increase of 5.6%.

The ONS said that the rise in Scotland's annual inflation rate over recent months "is more reflective of Scotland's average house price falling this time last year, rather than increasing in recent months". Meanwhile, Northern Ireland saw average house prices rise by 1.4% reaching £178,000 in the period leading to the fourth quarter of 2023.

Furthermore, across the UK, private rents recorded an estimated surge of 9.2% in the year ending March. This increase is marginally higher than the 9.0% jump witnessed in the year ending in February a record high since UK data collection began in January 2015.

The average private rent in Britain was calculated as £1,246 in March, a hike of £104 when compared with the same time the previous year. March data showed that a typical private rent in England was £1,285, 9.1% (£107) more than what it was a year ago. This represents the most significant increase recorded since the initiation of these records in 2006.

In Wales, the climb in rent prices remained consistent, with a 9% (£60) increase compared to the previous year. As of March, the average private rent in Wales stood at £727. This annual growth rate has held steady since the 12 months leading up to February, according to the ONS.

Scotland saw the average private rent reach £947 in March, which is a 10.5% (£90) hike from the previous year. The annual inflation rate in Scotland has been on a gradual decline after peaking with a record 11.8% increase in August 2023, the report highlighted.

Data for Northern Ireland was only available until January 2024. Here, average private rents soared by 10.1% over the 12 months to January marking the most significant annual increase since records began in 2016.

Commenting on the housing market trends, ONS head of housing market indices Aimee North remarked: "Our latest UK housing market data show a mixed picture. Average UK house prices fell again over the year, but less steeply than in previous months. Meanwhile UK rental prices continue to set new records."

PwC UK economist Jake Finney weighed in on the slight 0.2% annual dip in UK house prices, suggesting it could indicate "that we are approaching the end of the housing market correction". He further noted: "Ultimately, the extent of the recovery will depend upon the pace and scale of the Bank of England's rate cuts which are expected later this year. On the flip side, private rental inflation continues to reach new highs, adding to the cost-of-living pressures facing households."

The figures were released on the same day the ONS said Consumer Prices Index (CPI) inflation eased back to 3.2% in March, from 3.4% in February. It was the lowest level of inflation since September 2021, although economists had predicted a slightly lower reading of 3.1% for the month.

Andrew Montlake, the managing director at Coreco mortgage brokers, said: "Figures such as these inevitably make the Bank of England jittery and push the chances of a summer rate cut back into the long grass."

Rightmove's mortgage guru Matt Smith said: "It's positive to see inflation continuing to fall this morning, albeit not by quite as much as expected, as the blocks continue to build towards the anticipated first base rate cut later this year. The market is proving resilient despite broader global uncertainty, however continued stability in mortgage rates should be seen as a positive outcome over the next few weeks."

Tom Bill head of UK residential research at Knight Frank, pointed out: "Higher borrowing costs, increased supply and a wave of owners rolling off sub-2% mortgages agreed in early 2022 are all putting downwards pressure on house prices."

Mark Harris, chief executive of mortgage broker SPF Private Clients, said that until swap rates, which lenders use to price mortgages, are consistently falling, “lenders are unlikely to reduce mortgage rates further”.

David Hollingworth, from L&C Mortgages, highlighted the Bank of England's cautious stance: "The Bank (of England) is likely to take the threat of inflation remaining higher for longer seriously and has repeatedly suggested it won't act until it's sure that inflation is under control."

He also touched on the impact of market expectations on fixed-rate mortgages: "Market expectation will be important in determining fixed-rate pricing. Fixed rates have fallen substantially since last summer but have largely stabilised. With uncertainty still in the air as to how quickly the base rate may fall, those holding out for further cuts may find themselves in for a long wait."

Nick Leeming, chairman at Jackson-Stops, shared some positive trends in the property market: "Across the Jackson-Stops network in March we saw a positive uptick in the number of new instructions from sellers and sales agreed, this should soon trickle down into the number of completions we are seeing over the next few months."

He also noted the importance of fair pricing in attracting buyers: "It remains clear that where properties have been priced fairly, and in line with local market conditions, there continues to be high interest from committed buyers who are pressing on with their searches."

Jonathan Hopper, chief executive of Garrington Property Finders, said that until interest rates start falling again, many people who have delayed home moves will remain on the fence. He added: “The prospect of election uncertainty later this year may make the top of that fence very crowded indeed in coming months.

“The property market is heading in the right direction, but progress is likely to be slow and meandering, with wide variations across regional and local markets.”

UK house price falls are slowing down as rents rise at record pace (2024)


Should I buy a house now or wait until 2024 in the UK? ›

The latest property price figures show house price growth is slowing down - annual house price inflation stands at -0.3%, up from -1.4% back in October 2023. House prices could continue to fall in 2024 if mortgage interest rates stay high, which will make it less affordable for many to get on the ladder.

Are UK house prices slowing? ›

Average house price £263,600

House price inflation has continued to slow, with prices down on average by 0.5% year-on-year in January, according to property portal Zoopla. This follows a fall of 0.8% recorded in December 2023, writes Jo Thornhill.

Will rent go down in 2024 in the UK? ›

We project that UK rental inflation will halve to +5% in 2024. Meanwhile, the consensus among economic forecasters is that average earnings growth will also slow, to just below +4%. This means no immediate prospect that rental affordability will improve in 2024.

Is now a good time to buy a house in the UK? ›

Property analysts, estate agents and economists believe that this is a buyer's market, with activity, sales and prices all recovering faster than expected since the start of 2024. Some experts have suggested that now may be the time to buy, as house price falls have bottomed out – and values may soon rise again.

Should I buy a house now or wait until 2025 in the UK? ›

Deciding to buy a house now or waiting until 2025 in the UK depends on market timing. The Office for Budget Responsibility forecasts a dip in property as house prices fall. There is an expected average decrease of 7.6% between December 2024 and early 2025, suggesting potential benefits for those who can wait.

What will happen to UK house prices in the next 5 years? ›

According to the forecast, 2024 is expected to see house prices decrease by three percent. Between 2024 and 2028, the average house price growth is projected at 2.7 percent.

How much will the average house price drop in the UK? ›

UK house prices have fallen -0.3% in the last year, bringing the average house price to £263,900. Here's whether house prices are rising or falling in your region, city and local area in March 2024.

Should I sell my house now or wait until 2024? ›

Best Time to Sell Your House for a Higher Price

April, June, and July are the best months to sell your house in California. The median sale price of houses in June 2023, was $796,400, which is expected to grow more in 2024. However, cities like Arcadia and San Mateo follow an upward trend throughout the year.

Why are UK house prices falling? ›

UK house prices fell in March for the first time in six months as more costly mortgage deals and continued uncertainty about when the Bank of England would start cutting interest rates hit the property market. House prices fell by 1%, or £2,908, in March compared with February, according to Halifax's house price index.

Why are landlords selling up UK? ›

Simple. A spike in your tax bill thanks to 'Section 24' plus high interest rates mean owning rental properties is no longer profitable for many buy-to-let landlords.

Will England freeze rents? ›

The government has offered tenants some support during the cost-of-living crisis including £400 to support with energy bills. This means that a rent freeze is unlikely in England under the current Conservative government.

Why is UK rent so high? ›

An imbalance between supply and demand as the main driver of record-high prices. Households are also facing rising energy bills and food costs as part of the cost of living crisis and there is no respite when it comes to housing costs.

Why should you wait until 2024 to buy a house in the UK? ›

Bold interior trends, falling borrowing costs and new opportunities for first-time buyers will bring colour and life back into the property market in 2024. A bleak 2023 saw the market's pulse all but stop, as would-be buyers put their plans on hold to wait out the turmoil.

What time of year is cheapest to buy a house UK? ›

For this reason, November and December can be a good time to get a bargain. Sellers who are under no pressure to move often delist their properties with a view to re-launching in the new year. Those who remain are keen to sell their property and may accept a lower price.

What is the best month to buy a house UK? ›

What month is the best time to buy a house? April or May are generally the best times to buy a house in the UK. There are usually more properties on the market as sellers emerge from winter and consider a move, while the market is generally more active once the weather starts to warm up and the clocks go forward.

Will 2024 be a good year to buy a house UK? ›

Evidence suggests this is a good time to buy a house in the UK. The housing market is currently in a downturn due to economic struggles and high mortgage rates. With Zoopla predicting a 2% fall in house prices and a potential decrease in mortgage rates in 2024, now is a good time to buy.

How high will mortgage rates go in 2024 UK? ›

Mortgage rates are now past their recent peak. An 85% Loan-to-Value (LTV) 2-year fixed mortgage rate has come down from a peak of 6.35% in August 2023, to 5.03% in January 2024, according to the Bank of England.

Will 2024 be a better time to buy a house? ›

Most experts expect home prices to continue to increase in 2024, which will continue to make homeownership inaccessible to many. However, some forecast the prices will drop. Here's a handful of predictions. For context, home prices rose by 7.1% in 2023, according to Fannie Mae.

Will house prices drop in 2025 UK? ›

UK House Prices in 2025 will continue to fall

This would be a total drop of 11% from their peak last year, before beginning to recover. In 2025, Lloyds expect house prices to rise by 2.3%, while fellow lender Santander has predicted a rise of just 2%.

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