UK Property Market Trends in 2024: A Year of Stabilisation and Cautious Growth
2024 has been an interesting year for the UK property market, marked by a shift from the rapid fluctuations of previous years towards a period of relative stability and cautious growth. While the market hasn't seen the dramatic price surges of 2020-2022, it has demonstrated resilience in the face of economic headwinds. Let's delve into some of the key trends observed this year, including the important role of stamp duty.
Key Trends:
Moderate Price Growth: After a period of price adjustments in late 2022 and 2023, 2024 saw a return to modest price growth. According to the UK House Price Index, house prices rose by 2.8% in the year to August 2024. This indicates a stabilization of the market and a renewed confidence among buyers and sellers.
Increased Transaction Volumes: Alongside price growth, transaction volumes also saw an uptick. In July 2024, the estimated number of residential property transactions was 91,000, which is 6.7% higher than a year ago. This suggests a healthier market with more activity.
Regional Variations: As always, the UK property market experienced regional variations. While some regions like the North West saw stronger annual price growth, others like the South West experienced slight declines. This highlights the importance of considering local market dynamics when analyzing property trends.
Mortgage Market Influence: The mortgage market continued to play a significant role in shaping property trends. Although mortgage rates remained higher than the historic lows of previous years, they began to stabilize and even slightly decrease in 2024. This provided some relief to buyers and contributed to the increased market activity.
Economic Factors: The broader economic context, including inflation and interest rates, continued to influence the property market. While inflation remained a concern, signs of easing provided some reassurance to the market.
Stamp Duty Adjustments: Stamp duty, a tax paid by homebuyers in England and Northern Ireland, saw some adjustments in 2024. These changes primarily affected buyers of additional properties, such as buy-to-let investments and second homes.
Stamp Duty in 2024:
Increased Surcharge for Additional Properties: From October 31, 2024, the surcharge on stamp duty for additional properties increased from 3% to 5%. This means that buyers of second homes or buy-to-let properties now pay an extra 5% in stamp duty on top of the standard rates.
Impact on the Market: This change is expected to have several effects on the property market. It may: Reduce demand from investors: The higher tax could deter some investors from buying additional properties, potentially reducing competition for first-time buyers. Increase costs for landlords: Landlords may pass on the increased costs to tenants in the form of higher rents. Generate revenue for the government: The increased tax revenue could be used to fund affordable housing initiatives.
Key Moments and References:
UK House Price Index: The official UK House Price Index, published by HM Land Registry, provides valuable data on property price trends. The August 2024 index revealed a 2.8% annual price rise, indicating a return to growth. (https://www.gov.uk/government/news/uk-house-price-index-for-august-2024)
Zoopla House Price Index: Zoopla's House Price Index also highlighted the positive trend in the market, with a 1.5% annual growth as of October 2024. (https://www.zoopla.co.uk/discover/property-news/house-price-index/)
Savills Forecast: Property firm Savills upgraded its five-year forecast for UK house price growth, reflecting the stronger than expected start to the year. (https://www.savills.co.uk/insight-and-opinion/savills-news/359581-0/savills-upgrades-five-year-forecast-for-uk-house-price-growth)
Stamp Duty Changes: Information on the stamp duty changes can be found on the UK government's website. (https://www.gov.uk/stamp-duty-land-tax)
Looking Ahead:
While 2024 has shown positive signs for the UK property market, it's important to remain cautious. The market is still subject to various economic and political factors. The stamp duty changes, in particular, could have a significant impact on certain segments of the market. However, the current trends suggest a period of continued stabilization and modest growth in the near future.
Contains HM Land Registry data © Crown copyright and database right 2020. This data is licensed under the Open Government Licence v3.0.