Housing Market Subdued - Transactions Down By Around 15% Compared With 2019 Levels

1st July 2024

The latest Nationwide housing report paints a somewhat gloomy picture with mortgages hard to get and transactions down.

UK house prices up 1.5% in June compared with a year ago.

N. Ireland best performing region, with prices up 4.1% in Q2.

East Anglia weakest performing region, with prices down 1.8% over the year.

Average Price UK (not seasonally adjusted)
June 2024 - £266,064
May 2024 - £264,249.5%

Scotland - £181,186

"Housing market activity has been broadly flat over the last year, with the total number of transactions down by around 15% compared with 2019 levels. Transactions involving a mortgage are down even more (nearly 25%), reflecting the impact of higher borrowing costs. By contrast, the volume of cash transactions is actually around 5% above pre-pandemic levels.

"While earnings growth has been much stronger than house price growth in recent years, this hasn't been enough to offset the impact of higher mortgage rates, which are still well above the record lows prevailing in 2021 in the wake of the pandemic. For example, the interest rate on a five-year fixed rate mortgage for a borrower with a 25% deposit was 1.3% in late 2021, but in recent months this has been nearer to 4.7%.

"As a result, housing affordability is still stretched. Today, a borrower earning the average UK income buying a typical first-time buyer property with a 20% deposit would have a monthly mortgage payment equivalent to 37% of take-home pay - well above the long run average of 30%.

Mixed picture amongst the regions in Q2 2024

"Our regional house price indices are produced quarterly, with data for Q2 (the three months to June) showing a mixed picture, with some regions seeing a modest pick up in growth, but others still recording annual price declines (see full table on page 4).

"Northern Ireland remained the best performing area, with prices up 4.1% compared with Q2 2023. Across England overall, prices were up 0.6% compared with Q2 2023, while Wales and Scotland both saw a 1.4% year-on-year rise. Northern England (comprising North, North West, Yorkshire & The Humber, East Midlands and West Midlands), continued to outperform southern England, with prices up 2.4% year-on-year.

"Meanwhile southern England (South West, Outer South East, Outer Metropolitan, London and East Anglia) saw a 0.3% year-on-year fall (the same as last quarter). London remained the best performing southern region with annual price growth maintained at 1.6%. East Anglia was the weakest performing region, with prices down 1.8% year-on-year."

Source
https://www.nationwidehousepriceindex.co.uk/reports/house-price-growth-broadly-stable-in-june