We expect more optimism in the UK residential real estate market in the remaining months of the year as the Bank of England had their first rate cut in August, marking the beginning of their rate cutting cycle.
Although average mortgage rates increased since the beginning of February, they have started to decrease again over the past month. The average 85% LTV rate is at 4.91% on a five-year fix as of July 31st, 2024.
Residential property transactions increased from 254,090 in Q1 2024 to 272,700 in Q2 2024. This is the second quarter in a row where transactions have increased.
Average UK rents have increased by 7.1% y/y in Q2 2024. At the same time, the build-to-rent pipeline has decreased by 10.8% y/y in Q2 2024. This underscores that construction of new rental properties is simply not keeping pace with demand.
• House prices increased by +0.8% y/y increase in Q1, the largest quarterly increase since Q4 2022. • Despite recent coverage of some banks reducing mortgage interest rates, overall rates continued to ascend since the beginning of February. The average 85% loan-to-value rate is just under 5% on a 5-year fix. Those looking to re-mortgage or buy a new home are pinning their hopes that the Bank of England’s Monetary Policy Committee (MPC) will decide to cut rates at their June meeting. It is hoped, this will then be interpreted by forward-looking lenders as a strong sign of a future trend of cuts. • Rental growth accelerated further, standing at 6.8% y/y in Q1 2024. This is an increase from 6.3% y/y in Q4 2023. This highlights the urgent need to build more rental properties in the UK as unaffordability is an issue for many renters. • The PMI’s Residential Activity Index averaged 48.0 in Q1 2024, the highest quarter since Q4 2022. This shows that despite delivery of new housing stock being slow, it is improving. • The rate of rental inflation may have stabilised as it hit 6.3% y/y in Q4 2023, a small decline from 6.4% y/y in Q3 2023
Register your interest with Colliers New Homes on 028 9024 4000 or via email on info@colliersni.com.
Bryon Halt will boast a luxurious collection of 2 bedroom apartments in Holywood, just a minutes walk from the coast - with each apartment finished to the same high-quality standard throughout.
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