During the course of 2024 there has been never-ending speculation over when and how fast the base rate will come down. With inflation and wage growth proving more stubborn than expected and the economy bouncing in and out of recession, the outlook has been changing on a monthly basis. The money markets began the year by predicting a series of reductions from spring before changing to two in the summer, then just one in late autumn. Now it has changed all over again, with the Governor of the Bank of England, Andrew Bailey, hinting it might start coming down as soon as June and more quickly than was previously anticipated.

There is no doubt that the ending of the base rate rises and an expectation of future reductions mean there is growing confidence in the housing market. However, the uncertainty over the exact timings has led to many sitting on the fence until there is some more clarity. Others have reacted by targeting smaller properties and/or areas where their money goes further. Unsurprisingly, it has meant the market is going through a bit of a hiatus at the moment. Prices are relatively static, rising and falling each month but only by small margins, although activity levels have been steadily improving.

April’s figures are typical of the current conditions – Rightmove reports that asking prices were up 1.1%, Nationwide that prices were down 0.4%, whereas Halifax says they were up by 0.1%. The number of new sellers coming to the market, though, was up 12% when compared to the same period last year and agreed sales have risen by 13%. At the top end of the ladder, where there are more cash buyers, the numbers were significantly better – new sellers were up by 18% and agreed sales by 20%. In contrast, in the mid-market sector, which is the largest, new listings were up by a more modest 10% and sales by 13%.

When the base rate does start to come down, market conditions could improve quite quickly. Amanda Bryden, Head of Mortgages, Halifax, says:

“If, as is still expected, downward moves in Bank Rate come into play later this year, fixed mortgage rates should fall. Combined with the resilience displayed by the housing market over recent months, we now expect property prices to rise modestly over the course of 2024.”

HOUSE PRICES AND STATISTICS

As was the case last month, there is a degree of variation between the indices. And, once again, the most positive data is from Rightmove, whose index is also the most up-to-date.

Nationwide: Apr: Avge. price £261,962. Monthly change -0.4%. Annual change +1.1%
Halifax: Apr. Avge. price £288,949. Monthly change +0.1%. Annual change +0.3%
Land Registry: Feb: Avge. price £280,660. Monthly change +0.4%. Annual change -0.2%
Zoopla: Mar: Avge. price £264,500. Annual change -0.2%
Rightmove:Apr: Avge. price £372,324. Monthly change +1.1%. Annual change +1.7% (asking prices on Rightmove)

BUY-TO-LET

The rental market continues to cool, but only very slowly. As Tim Bannister, Rightmove’s Director of Property Science says,

“It is no longer at peak boiling point but remains at a very hot simmer.”

Industry body, Propertymark, has just released some data which provides some insight into the current conditions. According to their research, the average number of tenants registered per branch fell from 89 in February to 82 in March. At the same time, there was a minor increase in rental stock, with the average rising from just under 9 per branch to around 9.5. In addition, for the first time in a while, a small number of tenants were reporting their rent had fallen. Demand levels, though, remain very high, with 9 new applicants registered for each available property.

Despite the generally softening trend, the very latest data from Homelet’s rental index shows rents were up in April, rising by 1.6% to an average of £1,294. That’s an annual increase of 7.9%. In Greater London, rents jumped up by as much as 3.1% to an average of £2,167 and by 8.2% on an annual basis. Even though affordability is becoming increasingly stretched, Propertymark’s report also revealed that rental arrears remain at a surprisingly low level, with just 2.5% of the properties whose rents were collected by their member agents in arrears.