"The increase in house prices reported today brings to an end a long run of falls, and marks a clear turnaround in confidence among buyers"
- Richard Harrison - Atom bank
Average UK house price annual inflation stood at 1.8% in the 12 months to March 2024, compared with negative 0.2% in the 12 months to February 2024.
According to provisional estimates this morning by ONS, the price of a typical home in the UK in March this year was £283,000 - £5,000 higher than 12 months ago. Average house prices in the 12 months to March 2024 increased in England to £299,000 (1.0%), increased in Wales to £214,000 (1.3%) and increased in Scotland to £192,000 (6.7%). The average house price increased in the year to Q1 (Jan to Mar) 2024 to £178,000 in Northern Ireland (4.0%).
On a non-seasonally adjusted basis, average UK house prices increased by 0.7% between February 2024 and March 2024, compared with a decrease of 1.2% during the same period 12 months ago.
Regional breakdown
At the country level, the highest annual house price percentage change in the 12 months to March 2024 was recorded in Scotland, where house prices increased by 6.7%.
England saw average house prices increase by 1.0% in the 12 months to March 2024. In Wales they saw a rise of 1.3% and, in Northern Ireland, house prices increased by 4.0% over the same period.
Of English regions, annual house price inflation was highest in Yorkshire and the Humber, where prices increased by 5.0% in the 12 months to March 2024. London was the English region with the lowest annual inflation, where prices decreased by 3.4% in the 12 months to March 2024.
Nathan Emerson CEO of Propertymark, comments: “The housing market is a key indicator regarding wider economic health, and it is extremely positive to see further uplift and confidence within the housing sector. As inflation tracks downwards, it is widely anticipated the Bank of England will consider a reduction in its base rate and at this point we hope to see lenders offering a much wider range of competitive and highly targeted deals."
Richard Harrison, Head of Mortgages at Atom bank, comments: “The increase in house prices reported today brings to an end a long run of falls, and marks a clear turnaround in confidence among buyers. While inflation has fallen by less than expected today, denting hopes of an imminent reduction in base rate, the reality is that cuts are coming and that is bringing would-be purchasers back to the market.
“Asking prices at a record high is a signal of pent-up demand, with the number of sales agreed in the first four months up by 17% on the same period last year.
"This is borne out by figures from Propertymark showing that estate agents are seeing increases in the number of would-be buyers registering with them. This growing demand has already translated into house price increases reported by the Halifax and Nationwide indices, and it was only a matter of time before this was reflected in ONS reports given the lag in the data.
“It’s important to note that this increased appetite is coming not only from those with spotless credit histories, but also ‘near prime’ borrowers, those who may have had the odd payment blip in their past but who want to push on now with a purchase. Given the current cost of living crisis it’s crucial that lenders look beyond the black and white of a credit score in order to better support such buyers, and offer them a path onto the property ladder.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “This relatively modest acceleration in house-price increases, which includes mortgaged and cash sales, though a little dated shows how even anticipation of today’s drop in inflation is giving another boost to housing market activity.
“Confidence is such an important factor when it comes to home-buying decisions and there is no doubt that the cost of living too plays a huge part when buyers are deciding whether to take on further debt.
“On the ground, expectations are rising that mortgage rates are continuing on their journey south, even if they are not moving as far or as soon as many had expected."
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: “It is great to see inflation falling so rapidly but because it is not as much as forecast, this will make a rate reduction in June less likely unless the Bank of England is ready to be bold and brave.
“It’s a shame when what is essentially positive news is seen as disappointing. There is a sense that some buyers and sellers are waiting for that first rate reduction before taking action.
“Some momentum has emerged over the past couple of weeks with a number of big lenders reducing their fixed-rate mortgages on the back of the decline in Swap rates. Five-year Swap rates rose this morning to 4.11 per cent from 4.01 per cent yesterday largely because the markets have pushed back expectations of a rate cut so we will see whether this trend continues in the short term and what impact that has on mortgage rates."
