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The Average House Price in the UK Increased by over £3,000 in 2024

According to housing platform Rightmove, the average asking price for UK houses increased by £3,091 in February to £362,839, marking a 0.1% rise compared to the same period last year. This uptick follows annual declines observed since August 2023 and signals a strengthening momentum in the market. Additionally, the number of sales agreed in the first six weeks of the year surged by 16% compared to the corresponding period last year, suggesting that early buyers are confident in the market conditions for 2024 despite high mortgage interest rates. However, buyers remain budget-conscious, and sellers should be cautious not to overprice their properties and risk missing out on the active spring moving season. Tim Bannister, director of property science at Rightmove, noted that early buyers who capitalized on the abundant property choices during Boxing Day are now joined by others who also see favorable market conditions for moving in 2024.

Compared to early 2023, prospective homebuyers now have a broader selection of options. In the first six weeks of 2024, there was a 7% increase in the number of properties entering the market compared to the same period last year, with a corresponding 7% rise in buyer inquiries to estate agents. The number of sales being finalized is also up by 3% compared to 2019, indicating a shift towards more typical market activity levels, according to Rightmove.

However, despite this positive trend, buyers are not experiencing the same excitement that characterized the housing market during the COVID-era stamp duty holiday. While accurately priced properties are being swiftly snapped up by budget-conscious buyers eager to make their move in 2024 after a cautious 2023, overpriced properties are struggling to attract interest and are being overlooked by price-sensitive buyers.

Consequently, sellers are taking an average of 16 days longer to secure a buyer compared to 2023, marking the slowest pace since 2015, excluding the initial lockdown months of April and May 2020, as noted by Rightmove.

First-time buyers may require the most assistance moving forward, as activity levels and sales within this demographic showed the least improvement compared to last year.

“There continue to be reasons for cautious optimism as we settle into 2024, with encouraging activity levels and a more stable housing market,” Bannister added.

This new data coincides with UK inflation maintaining its stability at 4%. The figure remained unchanged from December and fell below economists’ predictions, including those of the Bank of England. According to economists surveyed by Reuters, prices were anticipated to increase by 4.2% compared to the same month last year. Inflation serves as one of the metrics the Bank of England considers when determining its base rate.

Meanwhile, recent data reveals that the average two-year fixed mortgage rate offered to UK borrowers has experienced its most significant monthly decline since late 2022. Moneyfacts reported a notable drop of 0.37% in the average two-year fixed mortgage rate in January, marking the largest monthly decrease since December 2022. Across all deposit sizes, the average two-year fixed-rate mortgage stood at 5.56% at the beginning of February 2024, down from 5.93% at the start of January this year.