The latest data from Home.co.uk’s Asking Price Index for June reveals a buoyant yet strained UK property market, grappling with an imbalance between supply and demand. Despite the positive market sentiment driven by improving inflation figures and anticipated rate cuts, concerns over oversupply persist as demand struggles to keep pace.
While property transactions remain high—unseen since late 2018, aside from three busy months last year—sales stock levels continue to grow. The mix-adjusted average asking price saw a 0.5% increase last month, although prices are still comparable to last summer and have not returned to their 2022 peak.
Regional disparities highlight significant annual growth in the northern regions, while the East of England and the South West lag behind compared to June 2023. The North’s consistent outperformance over the South post-COVID, coupled with better yields for investors, underscores this trend.
A cut in the Bank of England base rate is seen as both justified by lower inflation and necessary to support weaker regional markets. However, Prime Minister Rishi Sunak’s call for a general election on July 4 has delayed anticipated action, potentially pushing rate cuts to later in the summer or early autumn.
In light of the abundant property supply and impending election disruption, further price growth seems limited in the coming months. Prices are expected to remain stable until borrowing costs decrease, which would subsequently boost demand.
Property price reductions remain within normal ranges, similar to the summer of 2019, with vendors maintaining optimism. However, this could quickly change as patience wanes.
Typical Time on Market has increased in all regions except London compared to June 2023, yet median time on market figures remain improved compared to June 2019. This indicates that, despite a slowdown from last year, properties are moving at a fairly normal pace.
Asking rents continue to grow, albeit at a slower rate, with all regions except Greater London and the West Midlands showing positive growth. Scotland, Yorkshire, and the North East report double-digit annualised growth, while UK asking rents are 3.0% above May 2023 levels.
The annualised mix-adjusted average asking price growth across England and Wales stands at 0.5%, a significant improvement from June 2023’s -1.3%.
“We need a rate cut and we need it now! Not just for the sake of the UK property market but for the economy as a whole,” said Doug Shephard, director at Home.co.uk. “A cut would save the taxpayer a fortune in interest payments. The upcoming election has delayed what should have been a straightforward move by the Bank of England.”
