Residential Property Review – April 2024

Upcoming election has not discouraged potential movers

A survey by Savills has found that the prospect of the UK General Election has not put off the majority of home movers.

According to the report, 79% of respondents have not changed their intentions to move because of the UK election; in fact, 13% said that they were even more intent on moving. Just a small percentage (8%) were less sure about moving because of political uncertainty. Interestingly, the respondents most committed to their plans were those who plan to downsize or to relocate. Meanwhile, investors and those looking to secure a second home are more likely to hold off purchasing until the possible change in government.

Head of Residential Research at Savills, Lucian Cook, commented, “Despite a General Election nearing, the short odds on a change in government mean that political change is already largely priced into the market, and for the most part, buyers will remain undeterred about pressing ahead with moving decisions.”

A glimmer of hope for residential development?

There are signs that residential development activity is getting back on track, albeit cautiously.

A survey from the Home Builders Federation suggests that demand for new builds is increasing. In January of this year, the net reservation balance was positive for the first time since February 2022. Build cost inflation is also expected to further stabilise in 2024, having fallen from 15.5% to 3.1% in 2022-23 according to the Building Cost Information Service (BCIS). Additionally, the cost of labour and materials are predicted to reduce due to poor construction activity in the past year. 

While these signs of improvement are encouraging, housing development activity has still seen better days. Research from Knight Frank highlights that in 2023, housing starts in London were down 64% when compared with their peak point in 2015.

A boost in homeowners putting their property on the market

Spring got off to a promising start, as the Thursday before the Easter weekend was the busiest day of the year so far for new property listings.

According to Rightmove, on 28 March there were 45% more new homes listed than the previous Thursday. Since August 2020, there have only been two days which have seen a higher number of listings recorded – Boxing Day 2022 and 2023.

Tim Bannister, Rightmove’s property expert, advised that “while the uptick in activity we’ve seen over the past few months is a positive sign, sellers still need to heed the advice from their agent on pricing competitively to help secure a successful sale.”

House prices headline statistics

House Price Index (Feb 2024)*147.2
Average House Price£281,000
Monthly Change0.4%
Annual Change-0.2%

*Jan 2015 = 100

 

  • Average house prices in the UK decreased by 0.2% in the year to February 2024
  • On a non-seasonally adjusted basis, UK house prices increased by 0.4% between January 2024 and February 2024
  • The average price in London was £502,690

Source: The Land Registry

Average monthly price by property type – February 2024

Property TypeAnnual Increase
Detached
£435,938
0.5%
Semi-detached
£274,252
0.7%
Terraced
£229,443
-1.0%
Flat/Maisonette
£227,188
-1.0%

Source: The Land Registry

Housing market outlook

“With cost-of-living pressures easing as inflation moves back towards target, consumer sentiment is improving. Indeed, surveyors report a pickup in new buyer enquiries and new instructions to sell in recent months. Moreover, with income growth continuing to outpace house price growth by a healthy margin, housing affordability is improving, albeit gradually. If these trends are maintained, activity is likely to gain momentum, though the pace of the recovery is still likely to be heavily influenced by the trajectory of interest rates.“

Robert Gardener, Chief Economist, Nationwide

Source: Nationwide, March 2024

Contains HM Land Registry data © Crown copyright and database right. This data is licensed under the Open Government Licence v3.0.

All details correct at the time of writing (17 April 2024)

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Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission.

Residential Property Review – January 2024