_United Kingdom Property Market 2024 Update
Recent economic indicators in the United Kingdom reflect positive strides despite global uncertainties. Key highlights include a notable drop in the Consumer Price Index (CPI) from 11% in 2022 to approximately 4%, aligning with the government's target of 2%. Inflationary pressures have influenced rate cut expectations, with the five-year swap rate trading around 4.3%.
Money markets now anticipate between 2 and 3 cuts of 0.25% by the Bank of England in 2024, reflecting a dynamic environment. The housing market, a crucial economic barometer, is exhibiting encouraging signs. Mortgage approvals in January reached their highest level since late 2022, and annual growth in UK house prices has returned after a 13-month hiatus.
However, the economic landscape has experienced some fluctuations. Predictions for the bank base rate in February 2025 have shown volatility, with conflicting information emerging. While strong wage growth has supported core inflation, the UK unexpectedly entered a recession despite inflation being lower than expected at 4% compared to the projected 4.2%. This was followed by unexpectedly robust retail data.
The property market is witnessing a positive turnaround, as evidenced by the Halifax reporting a monthly price increase of 1.3% in January and an annual change of +2.5%. Mortgage lending rose in January, with net approvals for house purchase surging to 55,200, reflecting optimism for future borrowing.
In the capital, the rebound is driven by relative value, particularly in prime central London, where prices have experienced a 0.8% increase between Q1 2020 and the end of 2022. Super-prime markets (£10 million-plus sales) in London reached an eight-year high of 175 in the 12 months to November.
The lettings market in London is vibrant, attributed to factors such as a significant imbalance between supply and demand, the return of the corporate and student markets, decreased supply due to the stamp duty holiday and buoyant sales market, and delays in new build completions. As a result, rental prices in prime central London have surged by about 22% over the last 12 months.
To conclude, the momentum in the housing market is palpable, with mortgage approvals reaching a peak in January and annual growth in UK house prices returning after a 13-month hiatus. In response to these positive shifts, Knight Frank, your one-stop property solution, stands poised to guide you through every step of your property journey.
Navigating the intricacies of property acquisition in the UK can be daunting, but with Knight Frank, the process becomes seamless. From property search and purchase negotiations, where we handle legalities and tax applications, to unit inspections and transfers, our comprehensive service ensures you are supported at every stage. Unlike other companies, we don't just provide contacts; we actively engage with solicitors and legal experts on your behalf.
Furthermore, our services extend beyond acquisition. Knight Frank offers refurbishing and furnishing services to transform your property into a personalized haven. Whether you decide to resell or hold onto your unit, our dedicated Property Management Service ensures your investment is well-maintained and optimized for future opportunities.