This September, U.K. house prices experienced the fastest annual growth in two years, increasing by 3.2% year-on-year, and up from 2.4% in August, according to reports from Nationwide, UK’s largest mortgage lender.
The surge has been led by Northern Ireland with an 8.6% growth in house prices during the third quarter of 2024, while East Anglia saw a 0.8% decline, which makes it the weakest-performing area.
Nationwide’s data by property type highlights that:
A surge in house prices is an advantage to investors as it leads to an increased ROI. If the growing trend follows, investors will benefit from capital appreciation, as the value of their assets is growing over time. Rising house prices also correlate with higher rental demand and rental income, meaning a stronger cash flow for investors. The upward trend in property prices boosts buyer confidence and makes real estate an attractive asset.
Chief economist at Nationwide Robert Gardner pointed out that the average house prices remain 2% below the peak levels reached in Summer 2022. He also said “Income growth has continued to outstrip house price growth in recent months while borrowing costs have edged lower amid expectations that the Bank of England will continue to lower interest rates in the coming quarters.” adding that “These trends have helped to improve affordability for prospective buyers and underpinned a modest increase in activity and house prices, though both remain subdued by historic standards.”
Across England, prices were up 1.9% compared with the third quarter of 2023, with London outperforming Southern regions. The North West was the best-performing English region, with prices up 5.0%. Southern England saw a 1.3% year-on-year rise and London remains the best-performing southern region with annual price growth of 2.0%.
Matt Thompson, head of sales at Chestertons, attributed September’s surge in buyer interest to lower interest rates and the availability of sub-4% mortgage deals. He mentions “Pent-up demand, lower interest rates and sub-4% mortgage products resulted in more house hunters entering the market in September. In response to the uplift in buyer activity, and with looming changes to Capital Gains Tax in the upcoming Autumn Budget, we have also seen more sellers putting their property up for sale.” also, in his words: “We expect September’s level of market activity to continue in October but sellers will review their position following the Autumn Budget whilst some buyers await the next Bank of England announcement on interest rates in November.”
Propertymark’s Chief Executive Nathan Emerson said “As 2024 has progressed, it has been extremely positive to see a firm trend of growth emerge across the year within the housing market. We have seen the economy settle down to a position that provides far greater consumer confidence and although we are still at the very start of the journey regarding base rates, we are starting to see lenders introduce improved competitive offerings when it comes to mortgage deals, which is a firm foundation for confidence and growth over the coming months.”
At Value Invest we know this season is typically active in the UK property market, and this current year the combination of declining mortgage rates and an economy growing faster than inflation provides us an optimistic insight towards the potential of the market. Prices are solidly positive, which tends to increase buyer confidence and keep the market flowing.
The U.K. property market keeps showing its resilience and potential for growth, always offering great opportunities for property investors to capitalize, with a steady inflation rate reinforcing the market’s stability. This makes it a great time for new and experienced investors to consider expanding their portfolios while strategic investment decisions are crucial for success.
Investing in the UK property market requires thorough research to make sure you’re investing in the right areas, trust in the developers, and patience until completion. With the help of our expert team in Value Invest, we can guide your way to wealth accumulation.
Value invest identifies exceptional properties, pools together the resources of individual investors and purchases properties at a discounted prices:
–
Continue reading interesting articles:
© 2024 VALUE INVEST ALL RIGHTS RESERVED
© 2024 VALUE INVEST
ALL RIGHTS RESERVED
