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Nationwide HPI - "House prices begin 2024 on a more upbeat note"


Nationwide HPI - "House prices begin 2024 on a more upbeat note"

The housing market in the UK has shown promising signs at the start of 2024, with house prices experiencing a notable increase of 0.7% month-on-month in January. This positive trajectory has contributed to a further recovery in the annual rate of change, with prices now down just 0.2% compared to the previous year, according to data from Nationwide.


Robert Gardner, Nationwide's Chief Economist, commented on the figures, highlighting several encouraging developments. One significant factor contributing to the improved outlook for potential buyers is the downward trend in mortgage rates, driven by a shift in investor sentiment regarding the future trajectory of the Bank Rate. Investors' optimism about potential rate cuts by the Bank of England has led to a decline in longer-term interest rates, positively impacting mortgage pricing.


Gardner acknowledges the importance of mortgage rates in shaping housing market activity, particularly in addressing affordability pressures that have constrained market dynamics in recent years. He emphasises that while a rapid rebound in activity or house prices in 2024 may be unlikely, there are indications of a more positive outlook. The recent Royal Institution of Chartered Surveyors survey suggests a halt in the decline of new buyer enquiries, coupled with tentative signs of increased property listings.


However, affordability remains a key concern for prospective buyers, with the burden of raising a deposit posing a significant challenge. Despite a slight decrease from previous highs, a 20% deposit on a typical first-time buyer home still represents a substantial portion of average annual gross income.


Regional disparities in affordability persist, with areas like London, the South East, and East Anglia experiencing heightened pressures compared to more affordable regions such as Scotland and the North.


Gardner underscores the disparity between those aspiring to buy and those able to do so, particularly evident in areas where affordability is most stretched. In London, for instance, actual first-time buyers have significantly higher average incomes compared to the regional average, reflecting the challenges faced by many in accessing the housing market.


As the housing market continues to evolve, Gardner emphasises the importance of addressing affordability challenges and implementing measures to ensure sustainable growth across all regions of the UK. Despite the mixed picture presented by regional variations, the positive momentum at the start of 2024 offers cautious optimism for the year ahead in the UK housing market.


To read the full release from the Nation Wide House Price Index (National HPI) click here.

Alternatively, download the Nationwide HPI report here.

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