The British housing market is experiencing a phase of slower growth, with prices increasing by just 0.2% in June 2024, as reported by Nationwide. Despite a 1.5% year-on-year rise, prices are still 3% below their peak. Higher interest rates, driven by the Bank of England, are making mortgages costlier, affecting affordability. Projections indicate a modest 1.8% price increase for 2024. The Labour Party proposes easing planning rules to boost construction and address affordability concerns. As the market stabilises, buyers may find more opportunities, while sellers face a less frenzied but still resilient market.
The British housing market, once a growing property, seems to be entering a period of slower and steadier growth. While prices continue to inch up, the days of explosive growth appear to be over.
Nationwide, a major mortgage lender in the UK, reported a small price increase in June compared to May. However, this increase was just 0.2%, indicating a much slower pace of growth compared to previous years. This slowdown is partly due to the impact of higher borrowing costs. The Bank of England has raised interest rates in recent months, making it more expensive to take out a mortgage. This additional cost is making it harder for some potential buyers to afford a home, leading to a dampening effect on the market.
Despite the slowdown, house prices remain about 1.5% higher than they were in June 2023. While this doesn't match the peak prices seen a couple of years ago, it signifies the market hasn't fallen dramatically. Prices are currently around 3% lower than their record high.
Experts predict a mixed bag for future growth. A recent Reuters poll suggests prices might rise by 1.8% in 2024, but higher wages could make houses more affordable for some. Nationwide, however, highlights that even strong wage growth hasn't fully offset the impact of rising borrowing costs, which are currently at their highest level since 2008.
With housing affordability becoming a concern, Britain's opposition Labour Party, currently leading in opinion polls ahead of the upcoming election, has proposed changes. They aim to relax planning rules and potentially increase construction activity, making homes more accessible for buyers.
Overall, the British housing market seems to be entering a period of slower and steadier growth, with affordability likely to be a key factor moving forward. Potential buyers may have more breathing room compared to the fast-paced market of recent times. However, rising interest rates still need to be factored in when considering affordability. For sellers, the market might not be as hot as before, but prices remain higher than pre-pandemic levels.
Advertisement
Facebook
Whatsapp
