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UK house prices rise for first time since last summer, but 'no green shoots' say economists

Published 22/05/2024, 12:37
© Reuters.  UK house prices rise for first time since last summer, but 'no green shoots' say economists

Proactive Investors - Official UK house prices have returned to growth on an annual basis for the first time since last summer, helped by the strongest monthly gain since in almost two years.

The house price index was up 1.8% for March, according to Land Registry data crunched by the Office for National Statistics, much higher than the 0.1% expected and a swing from a 0.2% decline the month before.

The unadjusted official house price index rose by 0.7% month-to-month in March. In seasonally adjusted terms, prices increased by 1.1% month-to-month, the strongest gain since July 2022.

Rents increased by 8.9% on average in the 12 months to April 2024, down from the record high of 9.2% in the 12 months to March 2024.

In England, average rents increased 8.9% to £1,293, in Wales they were up 8.2% to £730 and up 10% in Scotland to £952, with Northern Ireland up 10.4%.

ONS chief economist Grant Fitzner said: “Average UK house prices grew over the year for the first time since last summer.

“House prices saw an annual rise in every nation and region, except London and the South East, with Scotland seeing the fastest annual growth.

“After two years of unprecedented and generally accelerating annual growth, private rental price rises showed tentative signs of easing. Most nations and English regions saw a slowdown, with a notable easing in London.”

The official house price index lags other available measures from lenders Nationwide and Halifax because it measures prices at the mortgage completion stage, compared to mortgage approvals.

"The jump in the official price index, therefore, shows what was happening a couple of months ago in the housing market, when mortgage interest rate falls in the early months of this year fed through to surging buyer interest," said economists at Pantheon Macroeconomics.

"With indicators from earlier in the purchase process suggesting price gains have cooled as markets have re-evaluated how rapidly the MPC will cut interest rates, the gains in the ONS index will likely slow in the coming months."

The Nationwide measure of house prices, for instance, has fallen for two months in a row.

Read more on Proactive Investors UK


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