House price growth remains at 14-month high

Annual house price growth remained at 2.7% ahead of the general election in June and was up just 0.5% on a monthly basis, official data shows.

The latest Land Registry House Price Index puts average property prices at £288,000, £8,000 higher than a year ago.

The annual growth figure at 2.7% is the same as May’s data, keeping house price inflation at a 14-month high.

Average house prices in the 12 months to June 2024 increased 2.4% in England to £305,000 and by 1.8% in Wales to £216,000, the index shows.

Scottish prices rose 4.3% to £192,000, while values in Northern Ireland were up 6.4% on a quarterly basis to £185,000.

All English regions experienced annual house price growth in June, led by Yorkshire and Humber with a 4.7% rise, followed by 4.2% in the North East.

London remains the most expensive region, with average prices up just 0.6% annually to £523,134.

The only regions to experience monthly falls were the East Midlands and the South West, down 0.5% and 1% respectively.

Commenting on the data, Iain McKenzie, chief executive of The Guild of Property Professionals, said: “The property market is holding steady, with house prices showing very little month-on-month growth but the annual figure enjoying a healthy rise. 

“Every part of the UK is seeing growth, even in London, where market recovery has been sluggish thanks to a long history of overly-inflated property prices.

“Buyers and sellers alike should welcome the balance we are seeing. If prices surge too quickly this year it would act as a deterrent for first-time buyers already struggling with affordability concerns.

“Inflation levels have tapered off, with today’s rise falling below analyst predictions. If the Bank of England continues to cut interest rates throughout the year and inflation holds steady, this will be a shot of adrenaline for the property industry.

“The Government has committed to ramping up house building in the coming years, but properties need to be priced so that they are affordable to the people living in the area.”

Meanwhile, data from LonRes suggests the prime London sales market saw a bounce-back in transactions in July, although prices continued to fall.  

Values across prime London fell by 4.9% on an annual basis in July, remaining broadly in line with 2017-2019 (pre-pandemic) levels. 

Sales activity had its most positive month of the year so far, with 8.7% more transactions recorded than July 2023, 23.7% above the pre-pandemic July average. 

The number of properties going under offer also increased in July, up 23.6% compared to the same month last year, LonRes said.

New sales instructions in July were unchanged from last year, and 2.3% higher than 2017-2019, according to the research.

The stock of available homes for sale continues to rise though, with 11.1% more properties on the market across prime London at the end of July than a year earlier.

Nick Gregori, head of research at LonRes, said: “July is typically a quiet month for the prime London sales market due to summer holidays, but this July has been a little different.  Transaction levels bounced back from a slow June, with delayed deals and pent-up demand from the pre-election period pushing sales well above both July 2023 and the average for the time of year.  The key question looking ahead is how sustainable this improvement is – are the conditions in place for a sustained recovery?”

Despite interest rate cuts, Gregory said there are barriers to a decisive recovery.  

He added: “There are expectations for a further interest rate cut this year, but with inflation forecast to increase again in the short term this could be delayed.  The volume of stock on the market continues to grow and, while this offers buyers more choice and could be positive for activity, it is likely to keep a lid on any price growth.  These issues are starker for the £5m+ market, where stock is growing quickly and cheaper borrowing costs are of less importance.”