House prices in the UK rose by 2.8 per cent against the backdrop of the lowest inflation for three years and prospect of interest rates coming down further.
The UK average according to the Office for National Statistics sat at £293,000 in the year to August 2024, though London prices are typically higher.
This marked an increase from the 1.8 per cent annual growth record in July, with the data released today, showing price increase occurred everywhere across the UK, with England’s up by 2.3 per cent to £310,000.
Meanwhile, private rent prices climbed even higher, increasing by 8.4 per cent in the 12 months up to September of this year.
This mirrors the increase we saw in August, highlighting a stable property market with constantly elevated rent despite some cooling in the rate of house price growth.
Price Index of Private Rents (PIPR) and UK House Price Index from the Office for National Statistics
This data comes as UK inflation slowed to 1.7 per cent, bringing it to its lowest point in three years.
Market experts believe that this could encourage the Bank of England to cut interest rates in its upcoming meetings.
Mark Harris, SPF Private Clients’ chief executive, said: “With inflation slowing to a lower-than-expected 1.7 per cent, it’s time for the Bank of England to be bold and brave with a rare cut in November”.
According to Emily Williams, director of research at Savills, ““the most recent mortgage data from the Bank of England showed that monthly mortgage approvals have risen to their highest levels since the 2023 mini-budget. Still, there is the capacity for more demand to be released, particularly from home movers, as rates continue to fall.”
Williams argued that “the market has been boosted over the summer by easing mortgage costs and increased certainty post-election”.
Meanwhile, Amy Reynolds, head of sales at Antony Roberts, said: “Even with lower inflation, considering the high cost of living, stamp duty and mortgages, it’s surprising the housing market is holding up as well as it is”.
This follows a recent RICS Residential Survey which showed renters are in for even tougher times, with rents steadily increasing, alongside house prices.