UK house price growth picks up as confidence returns

16th Oct 2024 10:12

(Sharecast News) - House price inflation in the UK accelerated in August, according to data from the Office for National Statistics on Wednesday, as buyer confidence returned to the market following the first cut in interest rates in four years.

Average house prices increased by 2.8% year-on-year to £293,000, rising sharply from the 1.8% annual growth seen in July.

Prices across England were up 2.3% at £310,000, increased by 3.5% in Wales to £223,000 and jumped 5.4% in Scotland to £200,000.

This was the sixth straight month of annual house price growth, following eight consecutive months of declines.

Commenting on last month's conditions, Foxtons' chief sales officer Jean Jameson said the estate agency chain saw "significant activity in the sales market in September", with buyer demand rising by 25% and vendor instructions up by 35%.

"This is all positive news and hopefully with another interest rate drop, we will see continued market growth into the new year," Jameson said.

At the same time, ONS reported that rent inflation stayed elevated at 8.4% in the 12 months to September, unchanged from the August reading. Private rents averaged £1,336 in England (+8.5% year-on-year), £760 in Wales (+8.3%) and £973 in Scotland (+7.2%).

"All eyes are now on the upcoming Budget," said Aaron Milburn, UK managing director at credit intelligence firm Pepper Advantage.

"On the supply side, buy-to-let mortgage holders - already struggling with higher rates - will be wary of potential increases in capital gains, while housebuilders will be watching for the greenlight to start building. Meanwhile, consumers are continuing to keep an eye on budgets after a challenging few years. These complex variables and the prospect of further rate cuts will dictate how the housing market fares heading into 2025."