UK House Price Index Summary - August 2024

Welcome to our August 2024 House Price Index blog. Here, we break down the latest data on the UK housing market.

From national house prices and changes, insights into different UK regions, to the latest on mortgage approvals and market sentiments, we’ll cover it all.

We’ll also review the findings from Halifax, Rightmove, and Zoopla to give you a rounded view of where the market stands today.

Whether you’re a buyer, seller, or just keeping an eye on the market, this blog will provide you with the essential insights you need.

Table of Contents

• Halifax House Price Index Summary

• Rightmove House Price Index Summary

• Zoopla House Price Index Summary

UK House Price Index Summary - August 2024

Halifax House Price Index Summary

The Halifax House Price Index for August 2024 provides a detailed analysis of the current housing market trends in the UK.

The report highlights national price movements, regional growth, and key mortgage market insights, giving a snapshot of the market's overall resilience amidst changing economic conditions.

National House Price Indices

• Average House Price: £292,505

• Monthly Change: +0.3%

• Quarterly Change: +0.8%

• Annual Change: +4.3%

House prices across the UK rose by 0.3% in August, following a 0.9% increase in July. The annual price growth of 4.3% is the strongest recorded since November 2022, primarily driven by the comparison with weaker price growth in 2023. The average house price in August 2024 stood at £292,505, approaching the all-time high of £293,507 set in June 2022.

Regional Market Analysis

• Northern Ireland: Continues to lead regional price growth, with a significant annual increase of +9.8%. The average property price reached £201,043.

• Wales: Strong annual growth of +5.5%, bringing the average home price to £224,433 .

• North West: The highest growth in England, with prices rising +4.0% annually, reaching £232,917.

• Scotland: Modest growth of +1.7% year-on-year, with the average home priced at £205,144 .

• London: Remains the most expensive region, with prices increasing by +1.5% year-on-year to an average of £536,056.

Mortgage Market Insights

• Property Transactions: UK residential property transactions in July totaled 90,630 (seasonally adjusted), showing a slight decrease of -0.6% from June.

• Mortgage Approvals: The number of mortgage approvals in July increased by +2.3%, with a total of 61,985, a notable rise of +26.5% compared to July 2023.

Additional Insights

The recent increase in house prices builds on a positive trend observed over the summer of 2024, largely supported by easing interest rates. As market activity picks up, there is cautious optimism about further growth in house prices through the remainder of the year, though affordability challenges persist for many buyers adjusting to higher mortgage costs.

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Rightmove House Price Index Summary

The Rightmove House Price Index for August 2024 delivers an insightful overview of the UK housing market, providing detailed information on national house price trends, regional variances, and the impact of recent economic changes.

National House Price Indices

• Average Asking Price (August 2024): £367,785, reflecting a -1.5% monthly decrease from July 2024.

• Annual Change: +0.8% year-on-year.

This seasonal monthly decline aligns with the historical August trend, as asking prices typically dip during the summer months due to reduced buyer activity while families are on holiday. The slight uptick in annual growth (+0.8%) highlights a market that is stabilizing following a challenging period in 2023.

Regional Market Analysis

• First-Time Buyers: Average asking price: £227,191, a -0.3% decrease from the previous month, but a solid +1.6% increase year-on-year.

• Second-Steppers: Average asking price: £340,605, down -0.9% from July 2024, with a modest annual rise of +0.7%.

• Top of the Ladder: For larger properties, the average asking price was £665,492, dropping -2.3% in August, with a slight annual growth of +0.1%.

Mortgage Market Insights

The Bank of England's recent base rate cut in early August has injected new momentum into the market. The number of potential buyers contacting estate agents rose by 19% year-on-year following the rate cut, compared to a 11% rise in July 2024. This boost in buyer activity has prompted Rightmove to revise its forecast for 2024, upgrading it from a -1% drop in prices for the year to a +1% rise​.

Mortgage Rates: The average 5-year fixed mortgage rate has fallen to 4.80%, down from 5.82% in 2023. The lowest available 5-year fixed rate now stands at 3.83%, the most competitive rate since the period before the 2022 mini-Budget​.

Additional Insights

August typically marks a quieter period in the housing market, but the Bank of England's rate cut has invigorated buyer sentiment. As the market heads into autumn, there is optimism for further recovery, with more competitive pricing and rising demand setting the stage for a positive end to 2024. While mortgage rates are still high compared to historical levels, improved affordability and stable economic conditions are encouraging more buyers to re-enter the market​​.

Zoopla House Price Index Summary

The Zoopla House Price Index for August 2024 provides valuable insights into the UK property market, with a focus on price trends, regional variations, and market activity. The report reflects a market that is stabilizing despite the challenges posed by higher mortgage rates and economic uncertainty.

National House Price Indices

• Average House Price (July 2024): £266,400, reflecting a +0.3% monthly increase from June 2024.

• Year-on-Year Change: +0.5% over the last 12 months.

The UK’s housing market has seen modest recovery, with house prices rising by 1.4% over the first seven months of 2024. The average house price is expected to increase by 2.5% by the end of the year, showcasing positive momentum across much of the country​​.

Regional Market Analysis

• Northern Ireland: Continues to be the best-performing region with a significant annual increase of +5.1%.

• Scotland: Recorded annual growth of +1.9%.

• London: After periods of stagnation, house prices in the capital are now rising, albeit modestly, at +0.2%.

• Conversely, areas such as the East of England saw a slight decline in prices, with a year-on-year drop of -0.1%, driven by affordability concerns and higher mortgage rates.

Mortgage Market Insights

• Mortgage Rates: The average 5-year fixed mortgage rate stands at 4.5% for a 75% loan-to-value (LTV), reflecting more stable borrowing costs after the previous spike in rates​.

• Market Activity: Sales agreed have risen by 23% year-on-year, and buyer demand is up by 20%. The increase in market activity is a positive sign, with more buyers re-engaging in the market following the base rate cut​.

Additional Insights

Despite the overall recovery in house prices, the market remains highly price-sensitive, with one in five homes reducing their asking price by 5% or more to attract buyers. However, this figure is lower than last year’s peak when mortgage rate hikes led to more significant price reductions​.

Key Takeaways

• Average house prices increased modestly across all indices, with Halifax reporting £292,505 (+0.3% monthly) and Zoopla reporting £266,400 (+0.3% monthly), indicating a steady market recovery.

• Northern Ireland led growth in all indices, with Halifax reporting +9.8% annual growth and Zoopla reporting +5.1%. London remains the most expensive region, with average prices exceeding £536,000.

• The Bank of England's recent rate cut has spurred increased buyer activity, with Rightmove reporting a 19% rise in inquiries and a drop in 5-year fixed mortgage rates to 4.8%.

• Approximately 20% of homes on Zoopla had their asking price reduced by 5% or more, reflecting continued price sensitivity among buyers.

• Zoopla noted a 23% rise in sales agreed, while Rightmove upgraded its 2024 forecast from a 1% decline to a 1% rise due to improved market conditions.

• Despite affordability challenges, the overall market sentiment is optimistic for the remainder of 2024, with modest price growth anticipated across most regions.

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