We’re already a quarter of the way through 2024 and a stocktake of statistics shows a resilient property market. In March, experts were waiting for two important figures to be updated: inflation and the base rate. The news on both was encouraging.
First came another drop in inflation. Inflation was 3.8% in February, compared to a figure of 4.2% in January 2024. This means the cost of goods and services is rising but the rate at which it does so is slowing.
Base rate held for another month
The second announcement came from the Bank of England (BofE). It met to decide the Bank’s base rate on 20th March. This was held, once again, at 5.25%. Although many hoped the fall in inflation would see the base rate reduce, the ‘hold’ means the mortgage market is stable.
Mortgage approvals increase
In fact, the BofE’s latest ‘Money and Credit’ report showed mortgage lending in February 2024 had increased. New mortgage approvals for house purchases between January and February increased from 56,100 to 60,400. This points to growing confidence among home buyers.
Another indication of growing confidence is an upward trajectory of average asking prices – rising by 1.5% according to Rightmove’s March House Price Index. This translates to sellers asking for an extra £5,279 in the last four weeks. The UK’s new average asking price is £368,118.
Other eye-catching statistics from Rightmove’s report include an increasing number of sales agreed. This figure is 13% higher now when compared to the same month in 2023. Buyer demand is also increasing, sitting at 8% above last year’s level.
While not directly linked to the property market, experts were happy to see the energy price cap fall at the end of March. Decreasing wholesale energy prices have allowed the cap to reduce to £1,690, which will apply between April and June 2024. As a result, households should see lower fuel bills, with more money in their pockets.
Away from house prices, there were a couple of important announcements in March that may affect the UK’s property landscape. First, we head to Scotland. The Land Reform (Scotland) Bill made its debut in the Scottish Parliament on 26th March. It promises to change how land is owned and managed in rural and island communities but will be subject to alterations as the legislation is debated.
Scotland braces for rental reforms
Staying in Scotland, another new Bill could shape the future of the country’s property market but this time in lettings. The Housing (Scotland) Bill details how landlords could be prohibited from raising rents as part of sweeping long-term market controls. The Bill also includes giving tenants the legal right to keep pets and redecorate their rented homes.
A radical reform of how property changes hands in England also took a step forward in March. The Levelling Up, Housing and Communities Committee launched an enquiry into how property is bought and sold. The efficiency of estate agents and conveyors will be examined, as will the amount of upfront property information available to buyers.
Rents edge up in March
In lettings, rents continue to rise but by modest amounts. According to Zoopla’s March Rental Report, rents are creeping upwards. In January, the average rent for new lets in the UK was £1,223 (published in March 2024). This was compared to an average new rent price of £1,219 in December 2023 and £1,213 in November.
More recent rental analysis by HomeLet shows the UK’s average monthly rent in March was £1,273 - a 0.9% rise when compared to February. In Scotland, the average monthly rent rose 1.4%. Increases were not across the board, however as the average monthly rent fell 0.4% in Wales.
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