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Average house prices rising by 2.8% in 12 months to August, up from 1.8%, shows "the impact of lower mortgage rates on demand"

ended 16. October 2024

Average UK house prices increased by 2.8% to £293,000 in the 12 months to August 2024, up from 1.8% in the 12 months to July 2024, according to official data published this morning. Average house prices increased in England to £310,000 (2.3%), in Wales to £223,000 (3.5%), and in Scotland to £200,000 (5.4%), in the 12 months to August 2024. 

Meanwhile, average UK private rents increased by 8.4% in the 12 months to September 2024 (provisional estimate); this is unchanged from the 12 months to August 2024. Newspage sought the views or mortgage and property experts, below.

9 responses from the Newspage community

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Andrew MontlakeVerified
Managing Director at Coreco
That was an unusual summer with activity higher than usual as buyers made the most of lower mortgage rates. The outcome is there for all to see in the form of stronger price growth. Following this morning's inflation data, showing headline inflation dropped to 1.7%, the rate reversals we've had in recent days could soon go into reverse themselves. Another cut to the base rate by the Bank of England is now likely with inflation comfortably below target and the economy still spluttering. Clearly, we have the small matter of the Autumn Budget to get behind us and many lenders may wait to see what that serves up before reducing again but for now we may see a stabilisation in rates. It is increasingly looking like the past two weeks were a spell of turbulence rather than the beginning of deeper upwards repricing in mortgage rates. That spells good news for the property market and should see a strong end to 2024.
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Ranald MitchellVerified
Director at bad credit mortgage specialists Charwin Mortgages
As mortgage rates have eased in recent months, we’ve seen a steady rise in demand across the property market and that is clearly driving average values up based on this evidence. Despite the latest uptick in mortgage rates, business is still brisk. With headline inflation now at just 1.7%, a couple of rate cuts by the Bank of England are looking more and more like a Christmas gift in the making. This should further fire up the housing market, leading us into a busy 2025. A lot depends, of course, on what the Chancellor pulls out of her fiscal hat in the next Budget. Meanwhile, in the rental market, rents are still very elevated as more landlords head for the exit. Expect more of the same unless a new policy changes the game.
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Kim McGinley0
Director & Specialist Broker at VIBE Finance
We saw a big uptick in mortgage demand over the summer months and we can now see the result in the form of stronger annual price growth. Looking ahead to 2025, we’re hopeful for more stability, especially post-Budget, and are really hoping the Bank of England makes at least one base rate cut this year, maybe even two, which may be more likely after Wednesday's inflation data. Then, with further reductions expected throughout 2025, we’re feeling optimistic about a more buoyant market that will hopefully work in favour of both buyers and sellers.
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Darryl DhofferVerified
Founder at The Mortgage Geezer
That's one hell of a rise in house prices and shows the impact of lower mortgage rates on demand and the market. With inflation dropping below target today, demand is likely to remain strong despite rates creeping up slightly over the past fortnight. The property market looks set to be very competitive in 2025, with demand outpacing supply. Recent months have seen a resurgence of buyer activity, driven by a belief that mortgage interest rates have peaked and the latest inflation data suggests they may have. However, a looming threat of increased capital gains taxes is prompting many landlords to sell, contributing to rising rents nationwide. Despite these factors, and as this data reveals, house prices are unlikely to decline, and are more likely to experience growth or remain stable.
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Chris BarryVerified
Director at Thomas Legal
This data shows the rapidly growing momentum in the property market as mortgage rates fell. While activity has slowed slightly in recent weeks as mortgage costs have risen, Wednesday's inflation data is likely to see mortgage lenders react quickly with reductions and therefore provide the shot of adrenaline the market needs to get back on track. We are seeing many investors seeking or transferring property before the 30th of October and buyers pushing for completion over the next two weeks in fear of potential SDLT rises at the higher end of the market. It's shaping up to be a very busy end to October ahead of the Budget.
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Rohit KohliVerified
Director at The Mortgage Stop
Over the past few months, we've seen an increase in enquiries and transactions as mortgage rates declined. House prices are only heading in one direction—up—as demand continues to outstrip supply. It's becoming increasingly difficult for first-time buyers to get onto the ladder. We need more lenders to step up with innovative ideas to assist them. From speaking to landlords, we've noticed rents stabilising, with any increases being more modest. Landlords aren't selling up, but they're also not eager to expand their portfolios at the moment. We need tens of thousands of homes built before house prices stop rising, and hundreds of thousands before prices even hint at falling.
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Craig FishVerified
Director at Lodestone Mortgages
This increase in property values follows the increased demand we have seen on the ground, and it's only going in one direction. Positivity around interest rates reducing is further fuelling demand and as affordability improves so will property prices, long into 2025, as we see the shift to a sellers' market. Landlords are also reporting that they are increasing rents as economic positivity returns, and I expect this to continue, but potential changes to CGT could see a few exit the market. For those who are considering a purchase, don't delay, now is the time.
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Graham CoxVerified
Director at Bridging Hub
Buyer interest has noticeably improved since the summer, encouraged by lower mortgage rates and an improved economic outlook. Rents continue to increase, with many property investors focusing on the high yielding HMO sector in major cities. Though some landlords remain cautious due to the imminent and long overdue banning of Section 21 no-fault evictions.
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Clive Read0
Owner at Goldmanread
We've seen a steady pickup in the market over the past few months. Confidence is returning as buyers feel that interest rates have peaked and are on a lower trajectory albeit no one expects a return to the ultra-low rates previously available. This morning's inflation figures are obviously welcome but to some extent the expectation of lower base rates has already been priced into mortgage rates. This is why some lenders have started to increase rates marginally in order to smooth out demand and allow for a return to normal processing timescales. The rental market is still in decline with landlords desperate to sell before the October Budget. Whilst for many it's probably too late to sell, the general anti-landlord vibes being given off by the new Labour government means it's not a comfortable place to be for many existing landlords. This will impact renters negatively. We expect a steady increase in house prices during 2025.