UK Property Market Activity Stabilises at Around Pre-Pandemic Levels

Savills’ latest Housing Market Update, published this month, provides data and analysis on the current housing and rental market.

The report has shown that house prices fell by -0.4 % in April compared to last month, but annual growth is still in positive territory, standing at 0.6%. Savills states that these fluctuations are due to sensitivity to mortgage interest rates in the current market. While the rates lowered in January and February, there has been an uptick recently. However, rates are still below the mid-2023 peak, which has positively impacted buyer confidence. Savills forecast that this will increase further once there is greater clarity over the first base rate cut after consecutive holds.

Buyer demand has dipped, while supply has seen an uptick. In April’s RICS survey, the number of surveyors reporting higher demand decreased, while those who saw an increased supply have now reached the highest level since September 2020. This has somewhat eased the supply-demand imbalance, putting downward pressure on house prices. The annual change in house price growth still shows a strong north-south divide, with northern regions showing more resilience in the face of a challenging market.

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The average rental growth for the UK as a whole in March was 6.9% year-on-year, unchanged from February. The report reveals considerable differences in growth when looking at the regional breakdown.

Strong annual growth was recorded in Scotland (9.6%) and northern regions such as the North West (8.5%). However, the East Midlands experienced a monthly fall of -0.1%, suggesting that prices may be approaching an affordability ceiling in this region, as we have seen in London.

Savills’ rental forecasts indicate UK rental growth of 6.0% this year and 18.1% in the five years to 2028.

To find out more about the UK property market, take a look at some of our buy-to-let area guides highlighting topics such as available investment property in Blackpool and available investment property in Doncaster.