Rental growth remains strong as we close out 2024, and more resilience is expected next year. But the picture on the sales side is less clear – some outlets report record prices and robust growth, while others found that prices are falling.
- UK average house prices hit a new record of £298,083 in November, according to Halifax. Prices rose 1.3% from October, almost £5,000 in cash terms, and are up 4.8% year on year.
- For its part, Nationwide reports that the average cost of a home in November was £268,184 – about £5,000 short of the record set in August 2022. The lender also reports lower year-on-year growth at 3.7%, but found that prices rose 1.2% since August.
- On the other end of the spectrum, Rightmove-listed house prices fell by 1.4% from October to November, to an average of £366,592. Even year on year, prices are only up by 1.2%. However, the platform expects more robust growth of 4% in 2025.
- Looking ahead to next year, Halifax’s Head of Mortgages Amanda Bryden said that positive employment figures and falling interest rates should support modest house price growth.
- However, affordability could be an issue. The latest Barclays Property Insights report revealed that mortgage and rent payments rose 8.2% year on year in November, reaching a 14-month high. Consumer confidence is still good, but the bank says that 29% of those surveyed are looking for ways to reduce their housing costs, while 41% are cutting back elsewhere.
- Meanwhile, data from the Bank of England shows that mortgage approvals in October were the highest since August 2022 at 68,303 – up an incredible 41.5% year on year.
- However, experts are split on why. Propertymark CEO Nathan Emerson welcomed the news and said that consumers are taking advantage of lower interest rates and inflation. But Simon Gammon, managing partner at Knight Frank Finance, said that the surge in activity was from people trying to get deals done before the Budget, and warned that static mortgage interest rates would “keep a lid on activity”.
- The Office for National Statistics’ Price Index of Private Rents for October showed that average rents increased 8.7% year on year, up from 8.4% in September. The average rent reached £1,348 in England, £976 in Scotland and £766 in Wales.
- Estate agency Savills says that high demand and low supply will continue to drive rents up next year. They report lower rental growth in 2024 than the ONS, measuring it at 4.3% year on year in September, and predict growth of 4.0% in 2025.
