UK Property Market Update: August 2024

It’s been an exciting year for the property world so far. Across the UK, there are lots of exciting new projects and developments, billions are being invested into key cities, and interest rates have finally seen a much-welcome reduction.

So, what’s happening in the market currently?

Interest Rates

As of August 2024, the UK’s interest rates have slightly reduced, marking the first cut in over four years. The Bank of England recently lowered the base rate from 5.25% to 5.0%. This move comes after a prolonged period of high rates, which had been maintained to curb inflation.

The decision was somewhat contentious, with the Bank’s Monetary Policy Committee (MPC) narrowly voting in favour of the cut. While inflation has fallen within the Bank’s 2% target, there are still concerns that inflation could rise again. At present, the outlook for interest rates remains overly positive, with an expectation that we will see further cuts in late 2024 – a welcome move for investors.

The current drop has already seen a great impact on mortgages and investments. Mortgage rates have already begun to decline, boosting the housing market. Initially, buyers waited for interest rates to fall, with fewer buyers entering the market in the first half of the year. Now there is an uptick of market activity after the announcement.

House Price Growth

Despite high inflation and political uncertainty, the UK’s house prices have continued to grow. This growth is robust in key areas – the top city being Manchester, which has become a hotspot for growth and investment activity.

To date, we have seen a modest but steady increase in house prices, with Halifax reporting a rise of 2.3% in July of this year. This shows that the predictions earlier in the year of 3% are well on track and truly achievable within 2024. In Greater London, house prices grew by 1.6% over the year to June, approaching the forecasted 2% for London specifically in 2024​.

Rental Growth

Despite uncertainty in the market recently, rental price growth has remained steady and even grown well in certain areas. London rental prices have been noted for their remarkable growth. The reason for this is due to the ongoing demand pressure, in part due to some first-time home buyers feeling unable to purchase due to the current interest rates and inflation.

On average, rental prices have increased by about 8.6% year-on-year as of July 2024, although the pace of growth is expected to slow down slightly towards the end of the year, with forecasts predicting an overall increase of around 6% for the year across the country. Over the next four years, UK rents are projected to rise by approximately 18.8% by 2028.

Summary

North Property Group is a premium property investment and lettings agency specialising in UK new build and off-plan properties in several key cities across the country. We partner with world-renowned property development agencies to offer the best investment opportunities to investors across the likes of London, Manchester, Leeds, and more.

Our approach is client-focused, letting the results speak for us. In addition to identifying the best property market deals, we offer comprehensive lettings management services, overseeing the entire tenancy lifecycle. Book a consultation with us today free of charge to begin your UK real estate investment journey.