UK House Price Index: House prices turn the corner as inflation start to ease

According to today’s UK House Price Index from HM Land Registry, UK average house prices rose 1.8% in the year to March 2024 (compared to an 0.2% drop in February 2024), with the average property in the UK valued at £283,000. UK house prices have also risen 0.7% since February 2024. 

The latest regional data also shows there was a significant variation in price rises across the UK, with Scotland leading the way with the highest annual growth of 6.7%, followed by Yorkshire and the Humber, which saw an annual price increase by 5%. However, London house prices fell in the year to March 2024 by 3.4%. 

Stacy Eden, partner at leading audit, tax and consulting firm RSM UK, comments: ‘Property prices have turned the corner which is no surprise given the expected fall in interest rates and falling inflation. Looking ahead, we expect to see house prices to continue with a gentle upward trend across the UK, driven by the lack of residential properties in the market. RICS also reported a fourth consecutive increase in the flow of new listings, while their house price trends suggest a largely stable picture for house prices at the aggregate level, while transactions figures in March 2024 (84,000) are below the normal level (100,000) but are up on February 2024. 

‘However, house prices are recovering from a peak-to-trough fall of at least 5% during 2023 and into 2024 which is significant given the high levels of inflation, but notably house prices are still 20% higher than they were at the start of pandemic. In addition, annual London house price growth was significantly below the national growth rate, highlighting the shallow recession hit house prices in areas where they are even more unaffordable. This is particularly true of some central London boroughs where annual double digit price drops have been recorded with transactions falling by more than 50%.’ 

He added: ‘The government’s scrapping of local housing targets suggests it is unable to deal with the chronic lack of housing in the UK. But, with a general election looming, there’s an opportunity for government to address this issue and encourage funds to the market by implementing planning reforms, investing in housebuilding and labour upskilling, and revisiting SDLT policy.’