Annual house price growth accelerated in August ‘showing market holding strong’

The average UK house price increased by 2.8% to £293,000 in the 12 months to August, according to the Office for National Statistics (ONS).

Annual growth ticked up from 1.8% in the 12 months to July 2024.

It was the sixth month in a row of annual price increases, following eight months of annual decreases.

Average house prices increased in England to £310,000 (2.3% annual growth), in Wales to £223,000 (3.5%), and in Scotland to £200,000 (5.4%), in the 12 months to August 2024.

The average house price for Northern Ireland was £185,000 in the second quarter of 2024, up 6.4% annually.

The North West was the English region with the highest annual house price inflation, at 4.6%. Annual house price growth was lowest in the South West, at 0.8%.

ONS figures also showed that in September 2024, the average private rent in Britain was £1,295 per month – a £101 or 8.4% annual increase.

Sarah Coles, head of personal finance, Hargreaves Lansdown, said: “Given the continued exodus of landlords, renters face the double misery of fighting over the scraps and then paying a fortune for them.”

Separate ONS figures released on Wednesday showed Consumer Prices Index (CPI) inflation slowed to 1.7% in September, from 2.2% in August.

The slowdown was driven by a sharp slump in petrol prices and lower airfares.

Myron Jobson, senior personal finance analyst, interactive investor, said the inflation figures put “pressure on the Bank of England to cut borrowing rates at its meeting next month, which could result in cheaper mortgage rates, although the opposite is likely for savings rates”.

Karen Noye, a mortgage expert at Quilter, said: “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.”

Richard Harrison, head of mortgages at Atom bank, said: “The markets continue to expect at least one more (Bank of England base rate) 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.”

Emily Williams, director of research at Savills, said: “The market has been boosted over the summer by easing mortgage costs, and increased certainty in the aftermath of the general election.

“Meanwhile, today’s inflation data, which is the lowest for three years, is encouraging. It suggests that we’re likely to see another cut to the base rate by the end of the year, which should further boost housing market activity by widening the pool of buyers and their budgets.”

Malcolm Webb, risk director, Legal & General Surveying Services, said: “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.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Mortgage rates have started rising in recent days on the back of higher swap rates (which are used by lenders to price loans), although these have since dropped considerably this morning on the back of lower inflation.”

Marc von Grundherr, director of Benham and Reeves, said: “We’re set for a very strong end to the year, despite the usual seasonal lull that comes with the Christmas period.

“A rush of sellers putting their home on the market means that many buyers find themselves spoilt for choice and able to negotiate hard on the price they pay.”

Jonathan Hopper, chief executive of Garrington Property Finders, said: “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.”

Gareth Atkins, managing director of lettings at Foxtons, said: “As the rental market begins to stabilise ahead of the winter months, we’re seeing key regional trends shaping the landscape.

“While overall demand in London saw a seasonal decline in September, due to longer tenancy timelines, areas like central London saw a 12% increase in applicants per new instruction.”