UK house prices rise year-on-year

Apr 03 | 2024

According to the latest Nationwide House Price Index, UK house prices are back on the rise following a period of stagnation.

In the UK overall house prices in March were up by 1.6% compared with the same period in 2023.  In Northern Ireland prices rose by 4.6%.  In the South West of the country, however, prices continued to fall by 1.7% compared with 2023.  The 1.6% increase follows a 1.2% increase to February 2024.

Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said: “Activity has picked up from the weak levels prevailing towards the end of 2023 but remains relatively subdued by historic standards. For example, the number of mortgages approved for house purchase in January was around 15% below pre-pandemic levels. This largely reflects the impact of higher interest rates on affordability. While mortgage rates are below the peaks seen in mid-2023, they remain well above the lows prevailing in the wake of the pandemic.”  Five-year fixed mortgage rates are currently running at around 4.5% compared with 2% between 2018 and 2021.

“With cost-of-living pressures easing as inflation moves back towards target, consumer sentiment is improving,” Robert added. “Indeed, surveyors report a pickup in new buyer enquiries and new instructions to sell in recent months. Moreover, with income growth continuing to outpace house price growth by a healthy margin, housing affordability is improving, albeit gradually. If these trends are maintained, activity is likely to gain momentum, though the pace of the recovery is still likely to be heavily influenced by the trajectory of interest rates.” 

Iain McKenzie, CEO of The Guild of Property Professionals, commented: “There is cautious optimism that the industry will see more activity this year, following the latest property sales data which showed a month-on-month rise. The outlook is still positive as we enter the spring, which is usually a busy season for estate agents.”

Nicky Stevenson, Managing Director at national estate agent group Fine & Country, said: “The property market is moving in a positive direction, with strong annual price growth. Demand is ramping up, with buyers feeling much more positive thanks to the heightened competition between mortgage lenders pulling borrowing rates down. This is making budgeting much easier, and easing some of the affordability pressures we have seen over the past year. Expectations that the Bank of England could soon commit to lowering the base rate is also driving more demand.”