May is traditionally a busy time for agents. The two Bank Holidays and warmer weather always encourages people to book valuations and viewings. This month there are other factors at play, as we discuss in our latest property market report.
Average asking prices attached to newly listed properties for sale have been rising throughout 2024. Rightmove says a fifth consecutive monthly increase has set a new record. Sellers asked for £2,807 more in May, when compared to April, with a new average asking price of £375,131.
House prices rise year-on-year
If you’re wondering how asking prices have affected final sold prices, the Office for National Statistics (ONS) has the answer. Its analysis, using sold prices lodged with Land Registry, showed the average UK house price increased 1.8% over the 12 months to March 2024. This is a reverse of the annual value decrease of 0.2% noted in February.
North of the border sees the biggest increases
The ONS was able to break down the price rises by country with Scotland leading the way. In the 12 months to March 2024, Scottish house prices rose by 6.7%. The increase was 1.3% in Wales and 1% in England. As a result, the UK’s average house price is now £283,000.
There was also news from the ONS on rental values. Further increases were recorded across the UK. Scottish average rents rose the most between April 2023 and April 2024. An annual increase of 10% has left the average monthly rent at £952.
In England, the average rent in April was £1,293 per month – up 8.9% over the last 12 months. In Wales, rents increased by 8.2%, with the average Welsh rent now £730 per month.
May was a month of political posturing as respective Governments adjust to changes ahead. English news was dominated by the Prime Minister’s calling of a snap General Election. Voters will go to the polls on 4thJuly 2024.
The period of ‘washing up’ – when live Bills are hurried along or dropped – saw the Renters’ Reform Bill fail to progress. It’s now for the next ruling party to pick up this Bill, although the entire process has to start from scratch. Experts believe the Bill may be radically reformed if Labour sweeps into power.
Changes ahead for the leasehold landscape
One property Bill did make it over the finishing line. The Leasehold and Freehold Reform Bill will shape England and Wales’s leasehold system. Although some of the proposals were watered down, it should be easier and cheaper to extend leases, buy freeholds and self-manage buildings in the future.
In Scotland, the consultation period for The Housing (Scotland) Bill closed in May. There are urgent appeals to reconsider some of its contents, especially the long-term rent control policy. It is thought the possibility of a rent cap is deterring investment in the build-to-rent sector.
Rent caps ruled out in Wales…for now
In May, the Welsh Housing Secretary moved to allay fears that a rent cap could be coming to Wales. When giving evidence to a Senedd inquiry on the private-rented sector, Julie James MS said early indications showed rent controls in Scotland were not working. For now, there will be a continued period of monitoring and consultation before any changes are made.
Of note for those who keep one eye on economics was inflation news. It was announced that inflation had fallen to 2.3%. Despite this figure inching closer to the 2% target, the Bank of England chose to keep its base rate at 5.25%. Both HSBC and Barclays, however, reduced mortgage rates in May.
If you would like to know more about your local property market, please get in touch.
