House Price Index: your friendly guide to the current property market
Whether you're a homeowner, investor, or simply curious about the state of the market, the House Price Index is your go-to source for reliable and up-to-date information. So let us guide you through the dynamic and exciting world of the property market.
As we all know, the property market can be a daunting and ever-changing landscape, making it challenging to keep up with the latest trends and developments. However, with our confident and informative updates, you can stay informed and ahead of the game. At Oakwood Homes, we have drawn together analysed data and compiled comprehensive reports on the current state of the property market, including key insights and trends.
Understanding the House Price Index
Delving into the House Price Index (HPI) might initially seem complex, but fear not, as we’re here to make it as clear and accessible as possible. At its core, the HPI is a tool used to measure the changes in the price of residential properties over time. Compiled using data from property transactions, it serves as a barometer for the health of the property market, offering invaluable insights to buyers, sellers, and industry professionals alike. What sets the HPI apart is its comprehensive coverage and methodical approach to calculating average house prices.
Photo by Ryan Collis:
By taking into account various types of property transactions, including cash purchases and mortgages, the HPI provides a well-rounded snapshot of the market's dynamics. It's important to understand that the HPI isn’t just a single figure: it's a collection of data reflecting regional variances, property types, and market segments, giving a granular view of how different areas and property types are performing. Arming yourself with the insights from the HPI can help you make informed decisions, whether it’s determining the right time to buy or sell or understanding the broader economic trends affecting property values. It’s a powerful tool that demystifies market trends and empowers you with the knowledge to navigate the property landscape confidently.
The latest trends in the property market
The property sector is bouncing back after a challenging period marked by low consumer optimism tied to broader economic difficulties. End-of-May reports from Nationwide highlighted a recovery in UK house prices had seen a modest bounce back following a downtrend over two months, noting a degree of market “resilience”.
Additionally, HMRC statistics indicated a fourth consecutive monthly climb in property transactions in April, with a 5% increase to 90,430. This rise follows modest mortgage rate hikes at the year's commencement, which initially dampened market activity into March and April.
Year on year, the average UK home price witnessed a 1.1% uplift as of April, as per the latest Office for National Statistics House Price Index. The mean home value reached £326,248, whereas the price for newcomers to homeownership stood at £235,851. Prices for newly constructed homes kept outpacing those of existing ones, showing a 15.3% surge versus a 1.3% decrease.
What is happening in rural areas
Nationwide's latest analysis indicates that local authorities deemed as mainly rural have seen average house price growth surpass that of urban counterparts from December 2018 to December 2023. In rural locales, average prices surged by 22%, while urban settings experienced a 17% increase. Areas identified as “urban with substantial rural” features observed a 19% rise in the same time frame.
Photo by Samuel Sweet:
Throughout 2023, there was a slight decline in average house prices across urban and rural settings, attributed to rising borrowing costs exacerbating affordability challenges. Despite the superior performance of rural markets, only eight of the top 20 local authorities in 2023 fell into the predominantly rural category.
The surge in demand for rural homes in recent times has been linked to the pandemic-induced “race for space”. Interestingly, it's rural semi-detached houses that have recorded the most significant price growth over the reviewed period, with average prices up by 24%.
How will the general election impact the property market?
Nationwide researchers examined the relationship between house prices and political events such as general elections and the EU referendum. Robert Gardner, the organisation's chief economist, noted that elections do not significantly affect the volatility or trend of house prices. Generally, the housing market continues its prevailing trend before, during, and after elections, with broader economic factors outweighing any potential electoral influence. It seems the timing of general elections has not historically altered the course of the housing market. For most individuals purchasing or selling homes, electoral considerations remain secondary.
Contrastingly, Compare My Move found that, on average, house prices increase by 4.6% in the year following a general election. Their analysis highlighted the influence of electoral outcomes on property values, notably identifying the difference between a hung parliament and a clear majority win. According to their findings, a decisive majority result leads to an average price increase of 6.9% compared to scenarios following a hung parliament.
For a regional perspective
If you would like insight into what is happening locally in the Thanet property market, please contact our team today. Call us on 01843 222701 or email client.services@oakwoodhomes.biz.
