The average UK house price was £281,000 in February 2024, increasing by 0.4% from the month prior, new data from HM Land Registry has revealed.
Average house prices decreased in England to £298,000 (negative 1.1%), decreased in Wales to £211,000 (negative 1.2%) and increased in Scotland to £188,000 (5.6%).
The average house price increased in the year to Q4 (Oct to Dec) 2023 to £178,000 in Northern Ireland (1.4%).
Of English regions, annual house price inflation was highest in the North East, where prices increased by 2.9%.
London was the English region with the lowest annual inflation, where prices decreased by 4.8% in the 12 months to February.
Reaction:
Katy Eatenton, mortgage & protection specialist at Lifetime Wealth Management:
“This data highlights the immense pressure tenants are under. Rising mortgage rates have meant many landlords have had no choice but to increase rents. The data also shows a slight recovery in the purchase market, which may be a result of lower mortgage pricing at the end of 2023 and early 2024. The significant drop in prices some predicted has yet to materialise, and is unlikely to.
“This is mainly due to lack of stock or vendors having no urgency to sell, meaning they are content to wait for the price they want to achieve. I have seen a lot of landlords selling up as high mortgage rates, coupled with new taxation rules, means any profit being made is eaten up by the tax owed. Rates need to come down hard and fast to reignite the amazing start to 2024 we had.”
Dariusz Karpowicz, director at Albion Financial Advice:
“Though prices are still in the red on an annual basis, the residential market is bustling this year compared to last, with an uptick in transactions and demand much stronger.
“Sadly, rents are also rising sharply, driven by landlords grappling with higher mortgage costs. Many landlords are choosing to exit the sector rather than hike rents steeply or absorb costs themselves. To enhance buyer sentiment, targeted financial incentives or support measures could help, as well as increased housing supply to alleviate tenant challenges.
“For 2024, expect rents and house prices to continue their ascent. The anticipated first rate cut from the Bank of England could be crucial, potentially easing some of the financial strain on buyers across the property market. But that first rate cut may not come for some months yet.”
Gary Bush, financial adviser at MortgageShop.com:
“In our experience, demand has been improving steadily in recent months among both first-time buyers and home movers. Though it’s certainly not 2021, there is a lot more desire to get onto the ladder and move home than there has been for some time. Pent-up demand from 2023 has got a lot to do with this, along with people getting used to the new norm for mortgage rates. All eyes are now on Threadneedle Street and that first rate cut. Sadly, following this morning’s smaller than expected fall in inflation, that may take a bit longer to arrive.”
Justin Moy, managing director at EHF Mortgages:
“Since January, there has been a definite slowdown in buyers in the market, although those still looking seem more determined to buy and are better prepared overall. Confidence is sharper among those buying higher-value properties. In contrast, traditional first-time buyers are more nervous, looking not only for mortgage help but more property advice at the same time. A base rate cut will lift the mood for all homeowners and first-time buyers but the prospect of one before the summer is rapidly diminishing. A further slowdown of the market is inevitable.”
Ross McMillan, owner/mortgage advisor at Blue Fish Mortgage Solutions:
“The Scottish market continues to shine, notably in Glasgow and Edinburgh, where prices remain robust amid fierce competition. While supply remains tight, there have been emerging signs of price reductions, signalling buyer resistance to inflated valuations and over-ambitious seller expectations. Moderate growth in prices during 2024 remains most likely.
“Influenced by ill-considered Scottish government interventions, the rental market in Scotland has witnessed eye-watering and above-average increases in rents in recent years. However, with these unnecessary restrictions easing slightly in recent weeks, there’s hope and some clear signs of more calm and stable times ahead, offering relief and certainty to both tenants and landlords alike. A Bank of England rate cut would inject optimism and pave the way for a dazzling summer, whatever the weather may throw our way.”
Tomer Aboody, director of property lender MT Finance:
“With prices increasing month-on-month, we are seeing the strength in demand and confidence within buyers who are taking advantage of steading interest rates and lower inflation.
“However, with sales volumes considerably lower than last year, higher demand versus lower supply will always push prices up.
“Sellers need to be encouraged to move in order to increase availability of stock in the market, and some movement in stamp duty rates would help.”
Mark Harris, chief executive of mortgage broker SPF Private Clients:
“With inflation continuing to move towards the Bank of England’s 2 per cent target, it’s time for the rate setters to be bold and start cutting interest rates. There is a sense that buyers and sellers are holding fire waiting for that first rate reduction, and when it comes, it will give the housing market a welcome boost.
“Falling interest rates have a knock-on effect on Swap rates, which underpin the pricing of fixed-rate mortgages. Five-year Swap rates rose this morning to 4.21 per cent from 4.14 per cent yesterday and until they are consistently falling, lenders are unlikely to reduce mortgage rates further.”
Mobeen Akram, new homes director, Mortgage Advice Bureau:
“While March proved slower than anticipated, new homes enquiries have remained consistently strong for the quarter – as has overall consumer demand.
“The latest UK HPI outlines a -0.2% annual price change for current properties, and a 16.4% annual change for new builds. This brings the average property price to £281,000 respectively.
“From these statistics, it’s clear that the ‘wait and see’ approach is slowly becoming a thing of the past. Instead, buyers are now sticking their heads above the parapet and taking decisive action towards getting mortgage ready.
“Today’s fall in inflation is yet another reminder of the progress we’ve made in terms of economic recovery. While swap and mortgage rates will continue to fluctuate, it’s great to see that consumer confidence is on the rise, and that the year continues to follow the trend of positive movement for the housing market.”
Steve Griffiths, chief commercial officer at The Mortgage Lender:
“With month on month house prices ticking slightly up, it appears as though some optimism returned to the property market following an unsettling year, largely owing to inflationary pressures and higher mortgage rates. However, with inflation falling, we’re seeing buyer confidence tick up again and translate to more positive market activity.
“Spring typically brings with it revival in the market, and coupled with expectations that the base rate will fall in the coming months, we should see a trend of buoyed activity hold steady. Of course, with an election on the horizon this year and general affordability concerns still prevalent, homebuyers and sellers alike will be keeping a close eye on what this means for the market this year. For anyone thinking about their buying plans for the year ahead, speaking to a broker can help ensure buyers are in the best position possible.”
Arjan Verbeek, CEO of Perenna:
“House prices have continued to fall for the fifth month in a row, yet prospective homeowners continue to face immense pressure on affordability – reiterating that house prices are only one factor affecting would be homeowners’ ability to get onto the ladder.
“The current mortgage market is very poorly suited to homeowners’ needs – dominated by two-to-five years fixes and hindered by an underwhelming lack of available alternatives. Making home ownership accessible will require structural reform – opening it up to new products, such as long-term fixed rate products, and amending regulation like the loan to income flow limit. If we are serious about improving access to homeownership, we cannot rely upon buyers waiting for house prices to fall – we must transform the mortgage market.”
Richard Harrison, head of mortgages, Atom bank:
“The decrease in house prices reported today continues the trend of successive drops since the middle of last year, but despite this there are signs of rising confidence levels among buyers.
“We have already seen improved levels of activity in the property market of late following a period of relative stability. Data from Rightmove for example found that the number of sales in March was up by 13% on a year ago, while there has been an 8% growth in buyer demand as purchasers push ahead with moves they may have put on hold at the end of 2023, while house price indices from Nationwide and Halifax have shown prices on the rise.
“The latest inflation data, also out today, shows that the consumer prices index (CPI) measurement has dropped from 3.4% to 3.2% highlighting the steady progress in curbing inflation which should lay the foundations for reductions in Base Rate. With talk of a Base Rate cut as early as June, and the prospect of lower mortgage rates on offer, competition for properties is only likely to increase from this point onwards. As a result, would-be buyers need to be able to move quickly in order to secure the finance they need to fund the purchase, putting greater emphasis on lenders to turn around decisions at speed.”
Nathan Emerson, CEO of Propertymark:
“A month on month growth in house prices is a sign of prosperous green shoots on the run up to spring, which is historic for its higher demand from buyers and sellers.
“This is showing strength within the market and signs of a stabilising economy.
“Propertymark’s own Housing Insight Report showed that there was an 18% increase in new properties coming to the market.
“Furthermore, the number of mortgage approvals made to home buyers increased from 56,100 in January to 60,400 in February, according to recent Bank of England figures, showing that all signs are pointing in the right direction, which should provide aspiring or current homeowners with the confidence they deserve right now.”
Ed Phillips, CEO of Lomond:
“We’ve seen numerous indicators of returning market health in recent months but any improvement in sold prices is always going to be more measured.
“So while further monthly growth suggests that we’re heading in the right direction, it may be a few months more before returning buyer activity tips the annual rate of sold price growth into positive territory.”
Ruth Beeton, co-founder of Home Sale Pack:
“It’s certainly shaping up to be a case of full speed ahead for the spring and summer months with respect to housing market activity and, as a result, we anticipate that the sluggish rates of sold price growth seen over the start of the year will soon start to unseasonably snowball.
“Those considering making their move are best advised to get a jump on this seasonal surge in market activity, as while it may be great for upward house price growth, it will also bring longer transaction timelines and a greater threat of fall throughs.”
Daniel Norman, CEO of APRAO:
“While the regular housing market continues to move forward at a somewhat subdued pace, new-build house prices are climbing at an alarming rate and the premium commanded for new homes now sits at its highest in a decade.
“This should help reassure the nation’s big housebuilders that while the landscape remains a challenging one, buyer appetites for new homes are strong and, as a result, we should see a consistent stream of stock entering the market throughout the remainder of the year.”
Jason Harris-Cohen, CEO of Open Property Group:
“It’s been a fairly positive start to the year with respect to the UK housing market but it certainly isn’t going to be plain sailing for the year ahead.
“With wider economic headwinds continuing to blow, not to mention the conflict in the Middle East, it remains an uncertain landscape.
“We’ve also seen a surge in swap rates of late which will inevitably dampen consumer confidence and this is leading to a spike in sellers opting for the quick sale route having fallen foul of an aborted sale on the buyers side.”
Verona Frankish, CEO of Yopa:
“With inflation continuing to fall, homebuyers will be hoping that an interest rate cut is right around the corner and this should only add to the growing market confidence seen in recent months.
“So far this year, market momentum has been building gradually and we expect that when rates do finally fall, this growing momentum will accelerate, driving house price growth in the process.”
Marc von Grundherr, director of Benham and Reeves:
“Further positive monthly growth is, of course, very welcome.
“However, it’s important to remember that given the lag in reporting sold prices, today’s figures related to February house prices and a market that has barely shaken off the impact of the Christmas lull in activity.
“What we’ve seen since is a consistent increase in mortgage approvals and growth in mortgage approved house prices and so it’s only a matter of time before the same becomes evident with respect to sold prices.”
Kay Westgarth, sales director at Standard Life Home Finance:
“Amid falling inflation and an acceptance of a ‘new normal’ for mortgage rates, today’s figures show that the property market remains on a stable footing.
“With a base rate cut firmly on the horizon, we can expect to see renewed competition among lenders vying for market share and sustained activity as we move through the year.
“Despite this optimistic outlook, we cannot ignore the high mortgage repayments currently faced by today’s borrowers, particularly those moving from a fixed-term plan on lower rates.
“House prices comfortably outpacing wage growth for a sustained period means many are having to dig deeper into their pockets to meet monthly repayments.
“It is important that people who feel their affordability has been challenged seek out a professional adviser to understand what options are available to secure a more stable financial future.”
Ben Waugh, managing director at more2life:
“The property market has again demonstrated its resilience this month, remaining steady in spite of a recession scare earlier in the quarter and mortgage rates edging back up.
“Inflation falling and the anticipated drop in base rate later this year should only further renew confidence within the market as we approach the summer months.
“In recent years, innovation in later life lending by manufacturers and growing education among advisers and their customers has fuelled new ways for people to engage with much-needed products.
“Whether it’s to fund some home improvements, or to free up some extra cash for a trip away, equity release can be an empowering financial tool.
“However, it remains crucially important that older borrowers seek the support of expert advisers who can comprehensively assess their financial standing and guide them in the right direction.”
Josh Skelding, commercial director at Fignum:
“Despite the initial rate cuts by the ‘big six’ lenders at the beginning of the year, the momentum of the mortgage price war has slowed.
“With financial markets now adjusting their expectations for an interest rate cut later in the year and economic uncertainties driving up swap rates, lenders are gradually reverting to higher pricing, which is reflected in house prices.
“Yet, amid the uncertainties, there are reasons for optimism. Moving into the spring months, which typically witness a surge in home listings unlike any other season, the market is poised to entice more potential buyers, driving increased engagement.
“In the current climate, lenders need to be nimble in response to market changes. By leaving behind outdated legacy systems and embracing cloud-based SaaS solutions, lenders can efficiently address demand and make real-time pricing decisions, ensuring potential buyers have the very best chance of finding a product that works for them.”
Richard Harrison, head of mortgages, Atom bank:
“The decrease in house prices reported today continues the trend of successive drops since the middle of last year, but despite this there are signs of rising confidence levels among buyers.
“We have already seen improved levels of activity in the property market of late following a period of relative stability.
“Data from Rightmove for example found that the number of sales in March was up by 13% on a year ago, while there has been an 8% growth in buyer demand as purchasers push ahead with moves they may have put on hold at the end of 2023, while house price indices from Nationwide and Halifax have shown prices on the rise.
“The latest inflation data, also out today, shows that the consumer prices index (CPI) measurement has dropped from 3.4% to 3.2% highlighting the steady progress in curbing inflation which should lay the foundations for reductions in Base Rate.
“With talk of a Base Rate cut as early as June, and the prospect of lower mortgage rates on offer, competition for properties is only likely to increase from this point onwards.
“As a result, would-be buyers need to be able to move quickly in order to secure the finance they need to fund the purchase, putting greater emphasis on lenders to turn around decisions at speed.”
Nick Leeming, chairman of Jackson-Stops:
“It is encouraging to see house prices stabilising early on in the year, positioning the market well for strong growth as we move further into spring.
“While this early stability reflects easing mortgage rates and increased supply, if the Bank of England chooses an interest rate cut in the coming months, there is also hope of a better paced recovery.
“Falling inflation, a more stable economic outlook and increased public confidence, have together painted a quietly positive outlook for the property market.
“While challenges naturally remain, with first-time buyers continuing to experience affordability challenges and the supply of new homes still falling short, the more balanced market that we now find ourselves is no small feat.
“Across the Jackson-Stops network in March we saw a positive uptick in the number of new instructions from sellers and sales agreed, this should soon trickle down into the number of completions we are seeing over the next few months.
“It remains clear that where properties have been priced fairly, and in line with local market conditions, there continues to be high interest from committed buyers who are pressing on with their searches.
“The market hopes that the remainder of 2024 continues to lay the path for a period of greater activity, positivity and completions at all stages of the market.
“The extent that 2024 ends in a stronger position than it began will be underpinned by the manifesto promises and political point scoring in the run up to the General Election.
“However, if the last few years are anything to go by, we have seen a market pattern of resilience against wider headwinds, whether they be political or economic.
“After the 2019 General Election, the ‘Boris Bounce’ created a surge in consumer confidence unlocking pent-up demand across the property market.
“Whilst a repeat of this phenomenon in unlikely, there is optimism that a decisive victory for a single party will unlock further investor confidence.”
