Index shows growth but house price below last year’s level

Posted on Wednesday, July 10, 2024

The latest e.surv index shows that house prices in England and Wales are, on average, still some 1.6% below the level of this time last year.

It says the average house price now at £360,175 up 0.4% on May, 1.6% down annually

Richard Sexton, director at e.surv, comments: “In June, the average sale price of a home in England and Wales climbed by nearly £1,500 (0.4%) to £360,175. This is the strongest performance for nearly a year. Prices are now within 5% of the previous peak reached in October 2022. June’s 1.6% decrease was a full percentage point improvement on May and the strongest performance since July 2023.

“Of course, within that there are regional stories. The 1.6% year-on-year decrease in house prices seen across England and Wales almost disappears if we exclude London and the South East. The North East and Wales continue to lead the charge in improving house price performance.

“Going forward, in light of the Labour win, we should see further improvements in buyer sentiment as the government sets out to deliver on its manifesto pledges. These are ambitious and will take time but include creating a number of New Towns, rethinking the green belt, mandatory targets for Local Authorities, a Freedom to Buy Scheme, and a pledge to lower the stamp duty threshold for first-time buyers in April 2025.

“Also, we may now see action from the Bank of England on interest rates, given the improving inflation picture, which will improve affordability for buyers.”

He continues: “Although there is always considerable volatility in month-on-month movements, June’s 0.4% increase builds on a smaller increase the month before. Against the backdrop of easing cost-of-living pressures for many households and the growing prospect of interest rate reductions by the Bank of England possibly later this summer, this may well herald the start of a more significant and lasting pick-up in market conditions.

“While year-on-year comparisons are still in negative territory, June’s 1.6% decrease was a full percentage point improvement on May and the strongest performance since July 2023.”

The index concludes by saying there is “a degree of positive momentum building in the housing market” which will inevitably take time but has at least started.

Via @LandlordToday