The market has seen an increase in activity since the outcome of the General Election in July due, not to any policy changes, but due to the “pent up” demand that had built up during the pre-election run in.
All of the major indices show that house prices have risen slightly with an average of 0.3% in July, resulting in an annual growth rate of 2.1%. This is the strongest rate of increase since December 2022.
Mortgage approvals have remained steady with lenders responding to the recent Bank of England base rate cut by reducing mortgage rates.
New instructions for property sales have increased and the number of sales agreed has followed this trend and also risen.
Annual rental growth across the UK remains above inflation but has slowed and in London and the South East, rental growth has further slowed due to affordability pressures, with reports indicating that renters are spending an average of 42% of their income on rent.
The market, whilst active, remains both price and confidence sensitive and the first Labour budget in October is predicted to see further tax increases that may impact confidence, particularly amongst investors and older property owners as both Capital Gains Tax and Inheritance Tax are expected to be targeted for increases by the Chancellor.
The Government will, however, need to balance their tax raising plans with, keeping inflation low, creating growth in the economy and pushing forward with their stated plans to build 350,000 new homes a year.
As with all markets, what may be a downside for some, will be an upside for others and, as always, if you’re considering buying or selling, letting or renting, it is essential to stay informed and seek professional advice. Our experienced team is here to help you with all aspects of your moving plans.
Darren Murphy
