Industry reacts to latest ONS property price and rent data

industry-reacts-to-latest-ons-property-price-and-rent-data

The latest figures from the Office for National Statistics (ONS) show average UK house prices increased 1.8% to £283,000 in the 12 months to March 2024. 

This was up from a decrease of 0.2% in the 12 months to February 2024 and was the first annual increase in prices since the 12 months to June 2023. 

In the 12 months to March 2024, average house prices 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%). Average house prices increased by 4.0% to £178,000 in the year to Quarter 1 (Jan to Mar) 2024 in Northern Ireland. 

Meanwhile, average UK private rents increased by 8.9% in the 12 months to April 2024. 

This was down from the record high of 9.2% in the 12 months to March 2024 and was the first slowing of the annual inflation rate since December 2023. 

The ONS caveats that UK monthly rents estimates for the latest two months and UK House Prices Index (HPI) estimates for the latest 12 months are provisional and subject to revision. All statistics are non-seasonally adjusted estimates.

Industry reactions: 

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.

“As many people continue to grapple with what has been a very challenging few years financially, the pressure remains for some renters. Ultimately there are a few reasons why rents continue to rise. However, what we are seeing is many landlords who strive to provide high-quality accommodation currently being squeezed out of the sector due to aspects like elevated interest rates and proposed changes to background legislation. Therefore, we need to see a much greater focus on ensuring the supply of homes meets current demand levels.”

Emma Cox, MD of real estate at Shawbrook, comments: 

“As we moved into spring, green shoots continued to appear in March as house prices maintained growth, providing the market with further optimism as the economy gets back on its feet.

“Professional landlords have remained agile, altering their strategies to weather the worst of recent uncertainty. As conditions improve, many will now be looking to add to their portfolios to diversify income streams and maximise yields in order to protect their strategies against any further challenges. 

“We have seen an increase in HMO activity in the buy-to-let market, as well as significant increases in landlords turning towards other high-yield options such as semi-commercial properties.”

Malcom Webb, technical director, Legal & General Surveying Services, comments:

“The latest figures are a reflection of the market’s resilience in the face of clear challenges. There’s plenty of activity to suggest that we’re moving in the right direction. With inflation approaching the government’s 2% target, there’s every reason to believe we’re in for a strong remainder of the year. 

“Although historically high mortgage rates and house prices are still here, first-time buyers haven’t given up on their home-owning dreams by any stretch. Comparing Q1 2024 and Q4 2023, we’ve seen a 37% increase in 18- to 30-year-old first-time buyers searching for a property. We’re also seeing more people looking for their first property at an older age. The point is that demand remains strong across the board.”

Richard Harrison, head of mortgages at Atom bank, comments:

“The increase in house prices brings to an end a long run of falls, and marks a clear turnaround in confidence among buyers. 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.”

Steve Griffiths, chief commercial officer at The Mortgage Lender, comments:

“House prices continued on their upward trend in March after a challenging start to 2024. This should provide sellers and property investors confidence that demand is growing within the market despite little movement on interest rates from the Bank of England. 

“Indeed, many buyers are pushing on with plans regardless. With positive signs that the Bank of England is set to make a move on the base rate in the summer months, demand is likely to continue, which will be positive news for those up and down the property ladder.”

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