Copy article

House prices surge to highest since Mini-Budget crisis

Journalist: John Choong (Head of Markets and Research), Newspage

ended 10. October 2024

The latest Residentlal Market Survey from the Royal Institution of Chartered Surveyors (RICS) showed that surveyors saw house prices grow by 11% in September, up from a downwardly revised 0% in August, and above consensus estimates of 4%. This marks the highest rate of respondents seeing house prices increase since September 2022, before the events of the Mini Budget crisis.

More encouragingly, respondents continue to be bullish about the outlook for house prices. Over the next 3 months, 12% of surveyors expect house prices to continue increasing, whilst a whopping 54% expect increases over the next 12 months, a further uptick from the 50% reported in August.

Other sub-metrics also remained in positive territory. Buyer enquiries were up, according to 14% of respondents, a touch down from the 16% reported in the month before. However, new listings rocketed, said 22% of respondents, from August's 9%. That said, sales volumes remain relatively muted, with only 5% seeing an increase, largely unmoved from 6% in August, although the outlook for the year ahead did improve to 44%.

Newspage asked mortgage brokers and property experts for their thoughts on the data, the outlook for the housing market, and what potential risks could undermine the positive outlook going into 2025.

10 responses from the Newspage community

Copy all

Star Quote
Copy

Platinum
Riz Malik
Independent Financial Adviser at R3 Wealth
Those who were waiting for house prices to fall before entering the market might be regretting their actions and the fact they were betting against a resilient UK housing market.

With lower mortgage rates and lenders reintroducing higher LTV products back onto the market, pent up demand from housebuyers are finally getting unleashed, and that's been evident in the recent mortgage approvals and new instructions data. If history is anything to go by as well, approvals and activity should continue to tick upwards, as has been the case in the past 7 elections. As such, house prices look like their are only going to go one way, and that's up.
Copy

Platinum
Stephen Perkins
Managing Director at Yellow Brick Mortgages
After months of both house price indexes showing increases, surveyors finally now agree on the upward trend. However, on the ground in Norwich, down-valuations continue to be seen — in line with the data seen from the RICS survey, which shows that house prices remain weaker in the West Midlands, South West and East Anglia regions for the time being. Nonetheless, the latest data is a hopeful sign for change.
Copy

Platinum
Chris Barry
Director at Thomas Legal
September activity certainly rose and with this came higher agreed sale prices — and we saw this on the ground, as September closed out our biggest ever billing quarter.

Thus, this raises the question of how this market is busier than the post-pandemic market with Stamp Duty Land Tax (SDLT) incentives. The reason is two fold. The first is that pent up demand from 2023 which saw low volumes due to unstable and high interest rates is finally getting unleashed. The second is that the post-pandemic era saw high demand and a supply rate that couldn’t keep up. And with this market having started with high supply followed by a flood of demand, this has resulted in more transactions.
Copy

Platinum
Craig Fish
Director at Lodestone Mortgages & Protection
We are seeing more enquiries than we have for a long time. This correlates with the numbers in this report. Increased demand results in increased prices, and all as a result of lowering rates and improved sentiment about the future. The switch to a sellers market is now truly underway. No doubt the upcoming changes to stamp duty are also having an impact, but the message remains — don't delay in hope that rates will reduce further.

As tensions in the Middle East rise and a potentially painful Budget to come in a little over 2 weeks, this could prove to be the perfect storm to spook markets. This could reverse the downward trend in mortgage rates, which would then make home ownership more costly again.
Copy

Platinum
Justin Moy
Managing Director at EHF Mortgages
This is hugely positive news on property prices, as RICS surveyors are agreeing with the recent Halifax and Nationwide valuation data.

A combination of pent up demand, lower mortgage rates, and steady increase in available property stock are certainly huge contributory factors, although owners also need a sense of realism on their figures, given high levels of down-valuations within the market.
Copy

Platinum
Dariusz Karpowicz
Director at Albion Financial Advice
This is exactly the kind of positive momentum the housing market has needed. With demand picking up and mortgage lenders consistently dropping rates — some as low as 3.5% — we’re starting to see the impact on house prices, which had stagnated for a while.

The doom-and-gloom predictions of a market crash haven’t materialised, proving the resilience of the UK property sector. New listings are also on the rise, which shows growing confidence. If we continue on this path, and the Bank of England follows through with a base rate cut in the coming months, we could see even more growth and stability in the months ahead.
Copy

Platinum
Simon Bridgland
Director at Release Freedom
The demand for bricks and mortar are at times like a runaway train, and September shows us just that. The general indication of prices in the RICS survey, whilst it gives reassurance to a tentative buyer, should always be tempered. This is because in some areas, even identical properties in the same block, can have wildly varying valuations for no obvious reason. Thus, I feel surveyors have, over recent months, shown some concerning variations in their options between companies.
Copy

Platinum
Gabriel McKeown
Head of Macroeconomics at The Sad Rabbit Newsletter
Britain’s property market renaissance continues, like a phoenix rising from the ashes of pessimism, however geopolitical storm clouds and interest rate volatility gather on the horizon. The combination of a competitive mortgage landscape and the potential for further interest rate cuts has created an environment ripe for increased buyer activity. Furthermore, there is growing optimism among surveyors, with 54% anticipating price increases over the coming year. However, the recent conflict escalation in the Middle East has injected a new element of uncertainty into the housing market outlook. While the BoE had previously hinted at potential rate cuts, the geopolitical situation has complicated the economic landscape, potentially delaying any easing of monetary policy. Despite the long-term trajectory for mortgages remaining downward, this trend is likely to be interspersed with periods of volatility and uncertainty, as evidenced by a cavalcade of lenders already increasing rates.
Copy

Platinum
Andrew Montlake
Managing Director at Coreco
The September surge in house prices showed just how resilient the property market is, as pent up demand started to spill out.
Buoyed by lower interest rates, better affordability and higher LTV products, and positive consumer sentiment, the last quarter of the year looks positive.
The budget is the biggest concern now.
Copy

Chris Baldrey-Chourio
Commercial Director at Beaufort Homes
Over the last two years, UK house prices have been on something of a journey but finally appear to be back in positive territory, especially with the cost of borrowing dropping and mortgage rates being cut on an almost daily basis.

The August interest rate cut instigated by the Bank of England has certainly boosted market confidence as sellers look to take advantage of rising demand due to the lower cost of borrowing. Thus it's no surprise to see more properties flooding into the market, according to the latest RICS data.

To complement this, buyer interest has also risen at its fastest rate in three years, with sales agreed and the number of properties presented in the new build and secondary markets also increasing. Both house builders and estate agents also expect further growth in the property market as we head into the final quarter of the year, marking a bullish outlook for the sector.