Asking prices increased by 0.2 percent during July across England and Wales – the seventh consecutive monthly rise – and are now up 1.2% compared with 2023.
Prices increased again in all English regions except the North-West and South-East, where they remain unchanged, as well as in Wales and Scotland, according to the latest Home.co.uk Asking Price Index (HAPI).
However, the unsold sales stock count for England and Wales rose again and now sits at a 10-year high for August. Nearly 6,000 properties were added to agents’ portfolios, taking the current total of unsold stock to 494,837.
The number of new instructions entering the market during July 2024 was 4% more than during July 2023, according to HAPI – the UK’s only independent forward market indicator, which is calculated every month using roughly 500,000 UK property prices.
Despite the 10-year high in unsold stock, sales market momentum remains relatively healthy, with the median time on market for unsold property being four days less than in August 2019. However, it is nine days more than in August last year.
North-East
The North-East has extended its lead as the regional property market growth leader with a year-on-year gain of 6.5%, while the South-West is now the worst performing region, with a loss of 0.3% over the same period.
The Market Turnover Indicator chart continues to show high activity, more or less on a par with the pre-Covid years. The report states that turnover appears to be levelling off slightly below the peak activity recorded in autumn last year, although this may be a side-effect of the general election. “We may well yet see an uptick of activity over the next two months, given the added buyer confidence triggered by the bank rate cut,” it notes.
However the mix-adjusted average asking price for England and Wales still remains 0.6% below the all-time high of August 2022.
2022 peak
“Given the first rate cut by the Bank of England with expectations of more to follow, it is conceivable that the 2022 peak could be surpassed in the next couple of months before the inevitable seasonal decline,” the HAPI report states.
“Should our estimates of current inflation be correct, the UK property market has now entered the first month of real growth since November 2021.
“Investment in much-needed new housing stock may begin to recover thanks to lower interest rates but tax incentives could go a long way to encourage more builders to commit.”
Landlords
On the lettings front, the report stresses that new stock is urgently required to ease the massive shortfall in rental properties. In August 2019, 96,000 properties were available for rent compared with the current total of 66,000, representing a drop of almost a third.
Doug Shephard, Director of Home.co.uk, says the new government needs to understand that rent fundamentally underpins the value of property, and that new laws regulating the lettings market should be very carefully considered.
Rent controls
“Activists’ calls for rent controls and an end to contractual tenure are casting dark shadows over the future of both the sales and rental markets,” he stated.
“Too many landlords are already selling up, fearful that either they won’t be able to set the rent required to cover their costs or they’ll be forced to join expensive licensing schemes, or both.
“I doubt many landlords will sleep easy while this kind of legislation hangs over their investments like a dark cloud.
“You can be sure the Labour Party will be egged on by activists such as Generation Rent. Graham Norwood, writing for Landlord Today, points out that Shelter and Generation Rent are already pressing for more powers for tenants, with Polly Neate – Shelter Chief Executive – stating:
‘The new Renters Rights Bill has to be a fresh start at reforming broken private renting. Not only does this mean urgently scrapping no fault evictions, but also setting clear limits to in-tenancy rent increases. The government cannot allow landlords to continue to force tenants out of their homes with eye watering rent hikes.’”
Read more about asking prices.