Average private rents increased by 8.4% in the 12 months to September 2024, the same increase as in August 2024, data from the Office for National Statistics has revealed.
Average rents increased to £1,336 (8.5%) in England, £760 (8.3%) in Wales, and £973 (7.2%) in Scotland, in the 12 months to September 2024.
In Northern Ireland, average rents increased by 9.5% in the 12 months to July 2024.
In England, rents inflation was highest in London (9.8%) and lowest in the South West and Yorkshire and The Humber (6.3%), in the 12 months to September 2024.
In addition, average house prices increased by 2.8% to £293,000 in the 12 months to August 2024 (provisional estimate); this annual growth rate is up from 1.8% in the 12 months to July 2024.
Regionally, average house prices increased in England to £310,000 (2.3%), in Wales to £223,000 (3.5%), and in Scotland to £200,000 (5.4%), in the 12 months to August 2024.
Reaction:
Richard Harrison, head of mortgages at Atom bank:
“House prices have been pushed higher once more, off the back of a much more active housing market.
“Data from Rightmove shows that the number of agreed sales is up by 25% on this point last year, with plenty of buyers who may have put their plans on ice deciding to pull the trigger.
“Sellers are more confident too, with the number of new sellers up by 14% on last year, while estate agents have the highest stock levels since 2014.
“That’s a recipe for a much busier market in the final few months of the year, and most likely further house price growth.
“While there’s no base rate decision in October, the markets continue to expect at least one more cut before the end of the year.
“We saw activity pick up after the first base rate cut in four years, and a second cut will only further boost interest among buyers, as mortgage rates become more attractive.
“With the Budget on the horizon, there is a great opportunity for the Government to take real action in supporting the next generation of homebuyers.
“The ambition to deliver greater levels of housebuying is welcome, but it is unlikely to be enough on its own and lenders have a role to play too.
“Fresh thinking is needed in order to provide would-be buyers with a better chance of getting onto, or moving up, the housing ladder.”
Nathan Emerson, CEO of Propertymark:
“It is extremely upbeat to see the year continue with consistent growth.
“The overall performance of the housing market remains a key indicator of wider economic health, and it’s encouraging to see more people are demonstrating they have the confidence and affordability to approach the buying and selling process.
“There are still sizeable challenges ahead to ensure long-term stability within the marketplace, especially on the back of an ever-growing population.
“It would be encouraging to see indications that the upskilling required to deliver the nearly two million homes promised across this parliamentary term is underway to ensure an adequate supply is under construction to meet the current levels of demand.”
Alex Upton, managing director, specialist mortgages, Hampshire Trust Bank:
“The rental market is showing no signs of slowing down, with rents continuing to rise across the country.
“Zoopla’s latest data highlights a 25% drop in available rental homes compared to pre-pandemic levels, while tenant demand remains sky-high.
“Unsurprisingly, this supply-demand imbalance is driving rents even higher, placing added pressure on tenants.
“Despite the narrative around landlords leaving the market, the data paints a different picture. According to Lomond, the number of tenanted properties listed for sale has fallen by nearly 20% since the end of June. It’s clear that while some landlords may be selling, many are instead adjusting their strategies to maximise yields.
“At HTB, we’re seeing a continued shift towards higher-yield investments, such as HMOs, which allow landlords to spread risk and generate stronger returns in today’s market.
“With the upcoming Autumn Budget, landlords are watching closely for any further regulatory changes, especially around Capital Gains Tax.
“However, the long-term view remains: professional landlords are adapting to these challenges, exploring niche opportunities, and staying invested in the sector.
“Time will tell how Government policy unfolds, but for now, the data indicates landlords are finding new ways to thrive rather than exit.”
Mark Harris, chief executive of mortgage broker SPF Private Clients:
“With inflation slowing to a lower-than-expected 1.7%, it’s time for the Bank of England to be bold and brave with a rate cut at November’s meeting, followed by another in December.
“Such reductions would be well received by the market, boosting activity at a time when there is plenty of uncertainty caused by the impending Budget.
“Mortgage rates have started rising in recent days on the back of higher Swap rates, although these have since dropped considerably this morning on the back of lower inflation. Borrowers can reserve mortgages up to six months before required, so it’s worth speaking to a broker and locking into a rate now in case they edge up further.
“If rates are falling again by the time you take out the mortgage, you can opt for a cheaper rate so won’t miss out.”
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts:
“Even with lower inflation, considering the high cost of living, stamp duty and mortgages, it is surprising the housing market is holding up as well as it is, but in London in particular this is down to limited supply coupled with plenty of demand.
“Price rises are fairly steady with a significant upward pressure in pricing requiring a considerable easing of mortgage rates and an influx of new buyers, neither of which look likely.
“However, healthy prices are being achieved on plenty of properties, and many are achieving asking price and even over if the property is particularly desirable.
“Sellers who are motivated should not wait for their properties to go stale but be proactive and take advice from their agent as to what the asking price should be.”
Ed Phillips, CEO of Lomond:
“A sixth consecutive month of positive house price growth demonstrates that the UK property market is very much heading in the right direction, boosted by a growing level of buyer confidence and an increased willingness to transact.
“Whilst interest rates remain a factor, we’re likely to see further cuts before the year is out and this will only strengthen the momentum that has been building across the market in 2024.”
Marc von Grundherr, director of Benham and Reeves:
“Summer may have come and gone, but the green shoots of increased buyer activity that have been sprouting for much of the year are now starting to blossom into robust transaction volumes and consistently positive rates of house price growth.
“Whilst we’re unlikely to see any sales market incentives delivered in this month’s Autumn Statement, the housing market is likely to march on undeterred and we’re set for a very strong end to the year, despite the usual seasonal lull that comes with the Christmas period.”
Verona Frankish, CEO of Yopa:
“August brought the first interest rate cut in over four years and it’s clear that this boost to buyer sentiment has had an almost immediate impact on the UK property market, with house prices rising notably throughout the month.
“Not only have we seen consistent improvements on a monthly basis, but this is the six month in a row that house prices have increased on an annual basis.
“This longer-term metric is a far more reliable measure with respect to the returning health of the UK property market and bodes very well for the remainder of the year.”
Aman Bajwa, co-founder and director of Fairbridge Capital:
“Today’s ONS data adds to the good news we’ve been seeing for the housing market, with Halifax reporting that house prices in September surged at their fastest rate since late 2022.
“At the same time, mortgage rates have been steadily coming down, with five-year fixed rates now dipping below 4%, as many expect more interest rate cuts on the way.
“This combination of rising prices and falling mortgage rates is creating a much more balanced and positive outlook for both buyers and sellers as we head towards the end of the year.
“That said, landlords and buy-to-let investors are a bit more cautious with the Budget just around the corner.
“There’s a lot of talk about a possible capital gains tax hike, and a recent report from Capital Economics suggests that could result in almost one million fewer landlord-owned properties over the next decade.
“With landlord purchases already at record lows, it’s definitely a concern. In these times, flexibility is going to be key.
“Specialist lenders can step in to offer the kind of quick, tailored financing that investors need to jump on opportunities and make successful investments, even when things are uncertain.”
Ryan McGrath, director of second charge mortgages at Pepper Money:
“All eyes are on the Budget in a fortnight’s time, but the housing market clearly isn’t waiting for the Chancellor’s speech to make moves towards recovery and growth. A modest summer house price surge after the July election is a sign of confidence steadily returning.
“House prices have been chalking up marginal but consistent gains since the start of the year, helping to put homeowners in a better financial position despite the higher interest rate environment.
“The pledge to shield working people from tax rises should mean this Halloween Budget doesn’t spook the markets and mortgage affordability should emerge intact.
“We’ve not yet settled into ‘business as usual’ mortgage lending in the post-pandemic era, and it’s very likely the new status quo will involve a bigger and more active market for second charge mortgages than before.
“A £2bn market for homeowner loans is within sight while still representing the tip of the iceberg.
“If you’re a homeowner in the process of making financial plans and weighing up your borrowing options, the chances are you’ll default to thinking about credit cards, personal loans and very little else.
“This ingrained habit means second charge or ‘homeowner loans’ are often the forgotten child of the mortgage world, but many people might find the time invested in seeking expert advice pays off in a better outcome, thanks to the flexibility, certainty and affordability which homeowner loans can provide.”
Malcolm Webb, risk director, Legal & General Surveying Services:
“These latest house price figures show the housing market is holding strong as we gear up for the final stretch of 2024.
“Mortgage rates remain more competitive than just a few months ago and innovative products – some offering up to six times your income – are keeping borrowers engaged.
“Buyer demand is up by 26% compared to this time last year and the latest Legal & General Ignite data shows that broker searches for first-time buyers rose by 9.1% in September.
“Plus, activity in Q4 will be further boosted by thousands of borrowers looking to remortgage.
“Whether you’re buying for the first time or nearing the end of your existing deal, getting professional mortgage advice should be at the top of your checklist.
“Even seasoned homeowners can find the market tricky to navigate, but with the guiding hand of an adviser, you’ll be well positioned to secure a positive outcome.”
Tomer Aboody, director of specialist lender MT Finance:
“The housing market continues to go from strength to strength with prices edging upwards as buyer and seller confidence grows.
“However, some of this recovery is down to the comparison with the static, slow market of last year, where prices and transactions were down.
“We are now seeing the fruits of a better economy and lower rates, with mortgages much more affordable than this time last year.
“Lower inflation should also persuade the Bank of England to take action and reduce rates further.
“With the October Budget looming, we hope this positive trend continues but many fear what Rachel Reeves might bring.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman:
“This most comprehensive of all house-price surveys, as it includes cash and mortgage transactions, demonstrates once again considerable market strength despite reflecting activity over the past three months at a time of economic and political turbulence.
“Today’s larger-than-expected fall in inflation, added to yesterday’s in wage growth, will raise expectations of further cuts in mortgage costs and be a welcome shot in the arm to buyer confidence.”
Jonathan Hopper, CEO of Garrington Property Finders:
“The property market enjoyed a strong Starmer start. But Budget uncertainty means recent weeks have felt more like a Reeves retreat.
“The annual pace of price growth accelerated dramatically during the new Government’s first full month in office.
“By the end of August, average prices across the UK were up 2.8% compared to the same time last year, and the prices paid rose 1.5% in August alone.
“The Prime Minister can’t take sole credit for this impressive return to form of course. While the sense of stability brought by July’s decisive election result clearly helped the market settle, the Bank of England played its part too.
“Its decision to cut interest rates at the start of August triggered a frenzy of competition among mortgage lenders, who cut the cost of borrowing to win business – and in turn allowed buyers to push up what they can afford.
“But in recent weeks price growth has slipped back into neutral in many areas. A rush of sellers putting their homes on the market means that many buyers find themselves spoilt for choice and able to negotiate hard on the price they pay.
“Mortgage rates have stopped falling too, even though today’s welcome fall in consumer inflation means further rate cuts could be on the cards for November.
“The slowdown in activity is most acute at the top end of the market, where many sales are discretionary.
“Wealthy buyers have been spooked by reports of painful tax rises to come in this month’s Budget, and some prospective sellers have gone into an early winter hibernation and decided to hold off on listing their home for sale until the spring.
“While today’s official data reveals that August’s property market was heating up nicely, things have cooled since then. Impressive and welcome though these numbers are, they may be more blip than boom.”
Karen Noye, mortgage expert at Quilter:
“House price growth appears to be picking up the pace, with an increase of 1.5% between July and August 2024.
“House prices are up across the country on an annual basis, but there remain some significant regional disparities.
“Yorkshire and the Humber saw the greatest monthly price increase, with a rise of 2.7%, while on an annual basis, the North West led the way with a 4.6% increase in house prices.
“Prices in London have risen 1.4% in the last year, meaning the average property value in the capital now sits at £531,212 – far out of reach for the majority of first-time buyers.
“Mortgage rates have fallen from their recent peaks, and this morning’s inflation data will give prospective buyers and those looking to remortgage a glimmer of hope that the Bank of England will continue to cut interest rates at its next monetary policy meeting.
“Many lenders are now offering deals with rates sitting around the 4% mark, and we could see this gradually begin to lower if the Bank continues on its path of rate cuts.
“Lower mortgage rates would translate to more affordable financing options for prospective buyers, which should boost buyer confidence and help buoy the market further.
“Buyer confidence appears to be rising, but with Labour’s first budget fast approaching, we may see a return to a more cautious approach.
“Any significant fiscal changes could impact mortgage affordability, and any economic hiccup could cause prices to stagnate or even reduce once again.”
Iain McKenzie, CEO of The Guild of Property Professionals:
“After a modest dip in house price growth last month, it is good news for sellers that the market is picking up once again.
“The property market has defied expectations once again, with prices rising 0.5% in August compared with July.
“This brings annual house price growth to 2.8%, significantly higher than many analysts predicted earlier this year.
“While the rate of growth has moderated from the double-digit increases we saw during the pandemic boom, the housing market is proving remarkably resilient in the face of higher interest rates and cost of living pressures.
“The average UK house price now stands at £293,000, up over £8,000 compared to this time last year.
“Affordability concerns and high interest rates – which are affecting the availability of competitive mortgage offers – are still holding back a full recovery of the sector.
“This is always a busy time of the year for estate agents.
“Buyers are often in a rush to sign on the dotted line so that they can complete and move in before Christmas.
“The increase in footfall should be enough to keep house prices stable for the rest of the year.
“There is a lot of anticipation to see what the Autumn Budget has in store for the property industry.
“After a tough couple of years for agents in some parts of the UK, we would like to see some measures in the Budget to incentivise people to buy.
“We know already that government initiatives such as affordable housing programs, zoning regulations, and building codes can influence the supply of housing and, consequently, prices.
“If played right, this could be positive news for buyers and sellers alike.”
Nicky Stevenson, managing director at national estate agent group Fine & Country:
“House prices rose in August, starting the traditional autumn house-hunting season, after many house-buyers put their search on hold for the summer holidays.
“As we head into autumn, many experts anticipate an increase in market activity. Indicators suggest house prices will continue to climb, driven by rising demand.
“Adding to the positive outlook, inflation unexpectedly dropped to 1.7% in the year to September, the lowest rate in over three years.
“With inflation now below the Bank of England’s 2% target, there is growing optimism for another interest rate cut next month.
“The pace of growth will depend on several key factors. The upcoming October budget could present challenges, particularly if tax increases strain personal finances and dampen demand.
“There have also been calls for Stamp Duty reforms in the Autumn Budget, proposing refunds for buyers of energy-inefficient homes.
“This initiative aims to boost demand for such properties and stimulate the market by encouraging energy upgrades and more transactions.
“The housing market’s resilience will be tested in the coming months, but many experts remain cautiously optimistic that it can navigate these challenges without significant disruption as we approach the end of 2024.”
