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Residential Research

UK Mid Year Outlook 2024

July 11, 2024

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2024 started with a renewed sense of optimism. While there was evidence of improved positivity with a pick-up in retail sales, consumer confidence, and a return to economic growth, there have been some less encouraging signs. Notably, the path of the inflation rate initially fell short of expectations as it all but levelled off, and investment volumes hit a record low. Still, as we find ourselves in the middle of the year, there are now stronger signs of a turning point.

Now that inflation has reached the Bank of England’s 2% target, the likelihood of an interest rate cut in August is high. As the cost of living pressures moderate, consumer demand will rebound. Overall, the improving economic backdrop is positive for both occupiers and investors, which should stimulate activity.

What to Expect

House Prices Overview

House prices also rebounded. At the time of writing, the Nationwide House Price Index showed annual house price growth of 1.5%. The ONS also reported positive annual house price movement, of 1.1%.

We forecast UK house prices to increase by 1% in 2024 and for sales volumes to recover by 10%. Both measures have been upgraded from our previous forecast made at the end of last year.

Mortgage approvals and mortgage rates

The sales market improved at that start of 2024, with mortgage approvals up 30% so far this year, compared with the same period of 2023.

Mortgage rates will be the main determinant of activity for the remainder of the year. These have risen recently but are still well below their peak of last summer. We continue to forecast an initial base rate cut in Q3 2024, which could be a fillip for homebuyers and the residential investment market

Affordable Housing

There has been an increase in the number of transactions across the affordable housing sector at the start of 2024, both for stock transfers and s.106 opportunities.

Activity in the sector is rebounding. With renewed interest from investors, and confidence from a broad stabilisation of values, it’s likely that investment will pick-up in the second half of 2024.

Explore our full Mid Year Outlook for further details on house prices, mortgage rates and the rental market.

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Contacts

Jen Siebrits

Head of UK Research

Phone +44 2071822066

Email

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Scott Cabot

Head of Residential Research

Phone +44 2071822362

Email

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Michael McGill

Associate Director

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UK Mid Year Outlook 2024

Download Our Full Report

What to Expect

House Prices Overview

Mortgage approvals and mortgage rates

Affordable Housing

Explore our full Mid Year Outlook for further details on house prices, mortgage rates and the rental market.

Residential Research

Contacts

Jen Siebrits

Scott Cabot

Michael McGill