2024 is an interesting year for the housing market so far as UK house prices rise for the fifth month in a row. In an economy that has provided a tangible decrease in mortgage rates and promises to lower interest rates, it seems as though buyers are encouraged to see this as a time to invest even if prices are now only £1,800 off from their 2022 peak.
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Halifax reports that the average house in the UK is at £291,699; it remains to be seen whether this housing market will continue maintaining the fine balance between growth and affordability as the government attempts to find a sustainable path forward for the economy.
The promise of the housing market
The UK’s housing market feels as though it should inspire confidence, the government is taking actionable steps to incentivise buyers to purchase. The attempt to inject energy into the market is quite palpable as there are also talks to decrease interest rates as inflation has fallen while wages are holding.
Furthermore, Jeremy Hunt announced a tax cut on higher rates of capital gains, which means that homeowners will have to pay the government less on the money they have gained from their house’s increase in value since they purchased it. This is meant to encourage landlords who may not be happy with their rental earnings or individuals who may be second homeowners to maybe sell their properties and take advantage of the new 4% tax break.
The government is trying to actively sweeten the deal for both buyers and sellers to create a reasonable market. All of these are good signs that indicate a positive outlook, for someone who has already has a deposit check prepared and is already in a financial standing that qualifies them for a mortgage.
These two requirements sadly stand between many people interested in the idea of home ownership and the actual pursuit of this goal. If the majority of individuals cannot afford a downpayment or do not qualify for mortgages, the government’s efforts will only delay an inevitable slowdown of the market.
Professionals react to the state of the housing market
While things are looking positive, everyone on both sides of the market should exercise caution, many industry professionals can be described as cautiously optimistic. The new housing strategies by the government are generating positive reactions.
Nicky Stevenson, managing director at estate agent group Fine & Country, spoke to The Guardian about the new tax cut:
It will be interesting to see whether the chancellor’s capital gains tax cut announcement in the budget encourages teetering landlords to sell their properties.
A rush of new listings would inject more energy into the housing market and may reignite demand from first-time buyers who have been struggling to afford a home in this high-interest rate environment.
While Amy Reynolds, head of sales at London-based estate agent Antony Roberts, said:
The market continues to pick up momentum after a relatively quiet 2023, with a flow of committed buyers and a strong pipeline of serious applicants, which bodes well for a busy spring market.
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Sources:
Yahoo!: UK house prices rise for fifth month running
The Guardian: UK house prices near 2022 peak after fifth monthly rise in a row
