Annual private rents in the UK rose by 7.7% in March.
That’s according to data from the government’s Price Index of Private Rents (PIPR). It’s a drop of 0.4% from February, with the biggest rise in rental inflation in the North East at 9.4%. It’s the first time in two years that the highest rental inflation rise wasn’t in London, which saw a 9.1% jump. Landlords in Yorkshire and The Humber saw the lowest annual rental inflation, at 4.6%.
England has highest private rental inflation
Country-wide, average rents rose by 7.8% to £1,386 in England (an increase of £101 compared to a year earlier). The jump was 8.9% in Wales to £792 and 5.7% in Scotland to £1,001. Figures to January 2025 saw rents in Northern Ireland increase by 8.2% to £838.
In terms of individual local authorities, the highest average rent in the UK was in London’s Kensington and Chelsea where tenants were paying around £3,639. The lowest rent was in Dumfries in Galloway in Scotland, at £528. The highest average rent outside the capital was in Elmbridge in the South East, with a cost of £1,893.
Cost of average property up more than 5%
The cost of the average UK property came in at £268,000. This was an increase of 5.4% and an annual monthly jump of 0.6%. In England the average property is now priced at £292,000, This compares to £207,000 in Wales and £186,000 in Scotland.
Property being ‘snapped up’ in 19 days
Meanwhile, the end of the Stamp Duty holiday hasn’t put paid to the British public’s appetite for moving home if Zoopla’s latest report is anything to go by.
The portal points out that in Waltham Forest in North East London, properties are selling within 19 days of being on the market. And the UK average isn’t bad either – with most properties selling within around 36 days. Property in some of the larger cities, such as Manchester, Gateshead, and Carlisle are also selling fast – mostly within 32 days.
Property prices in the UK fell slightly last month.
That’s according to the most recent data from the Halifax. The dip was slight – from £298,274 in February to £296,699 in March.
That meant a monthly drop of 0.5%. However, year-on-year, prices were up 2.8%.
Regionally, the highest annual property growth in England was in Yorkshire and the Humber, with a monthly increase of 4.2%. In Scotland it was 4.3% and Wales 3.7%. Northern Ireland had the highest jump, at 6.6% growth for the average property there.
Twice as many properties sold in March
A spokesperson for the Halifax said the market was now returning to normal after the Stamp Duty rush.
“Our customers completed more house sales in March than in January and February combined, including the busiest single day on record,” she added.
Despite this, many property analysts remain hopeful that future mortgage interest rate cuts will result in a bustling market again. That’s because the Bank of England is expected to cut it is base rate several times later this year. Wages are also expected to go up.
Good news for future fixed deal mortgage rates
Mark Harris, chief executive of mortgage broker SPF Private Clients, also brought in a glimmer of optimism for would-be buyers. He said Donald Trump’s tariffs had increased the likelihood of better mortgage deals.
He explained: “If this continues, lenders could respond with a flurry of five-year fixed rates starting with a three as opposed to the current position of only one or two [mortgage rates] priced under 4%.”
All areas see an annual rise in prices
After Yorkshire & the Humber, the next biggest property price rises in England were in the North West (3.8%), West Midlands (3.3%), East Midlands (2.9%), the North East (2.3%) and South East (2%). In Eastern England prices increased by 1.7%, while in London the jump was 1.1%. The rise was lowest in the South West, with just 1%.
From this week, councils in England can now charge higher council tax rates on second homes.
And around two thirds of local authorities in the country are set to do just that, as part of the Levelling-up and Regeneration Act introduced last year.
In some cases, second home owners could face a council tax bill of around £10,000, thanks to new powers to raise a second homes levy by 100 per cent. Having said that, most owners will be looking at a 77 per cent rise, resulting in an additional £3,672 for the following tax year.
Second home owners in Cornwall to be badly hit
Owners in seaside resorts, such as Cornwall, will be funding the council’s coffers by millions. That’s because there are 14,123 second or ‘holiday’ homes in the town.
In Rutland, near London, second home owners could be looking at a £10,684 increase of their council tax.
Council in popular seaside spots in particular hope the increased tax on second homes will lead to many owners selling up, leaving the property for locals to buy.
Tenby – a case in point
Judging by the experience of Pembrokeshire Council Council in Wales, however, that isn’t likely to be the case. Their 200 per cent premium on second homes in Tenby resulted in nearly a quarter of all properties in the town lying empty as owners sold them on.
And, although the town has seen property prices fall – by as much as 8.9 per cent – it’s still not enough for locals to be able to afford to buy. That’s because the average property is still around £273,000.
Councillors admit they ‘went too far’
In an attempt to stem the rate of growth of empty second homes in the town, the council has now reduced the premium to 150 per cent.
But some local businesses say it may be too late. They’ve already suffered financially by the loss of tourist trade from second home owners. They’re also wondering if the town will ever fully recover. English local authorities should definitely take note.
UK House Prices may be on the rise, but the market is slowly and surely becoming a buyers one.
This week’s Royal Institution of Chartered Surveyors (Rics) survey found that buyer demand had fallen by 14% last month. That compared to a drop of just 1% in January. Changes to stamp duty due to come in on April 1 will ensure that demand falls even further according to many property analysts. At that point, buyers will have to pay duty on properties at more than £125,000, compared to a minimum of £250,000.
Buyers still prefer to ‘watch and wait’
The Bank of England may have cut interest rates, but the ongoing cost of living crisis means many house hunters need the Base Rate to drop even further before they’ll venture into new homes territory. At the same time worldwide economic tensions as a result of US tariffs and the continued Ukraine war, are forcing many would-be buyers to wait until further down the line for a more ‘stable’ situation.
On the plus side for buyers more housing stock is entering the market, providing more choice and a less competitive market all round.
Simon Rubinson, Chief Economist for the surveyors professional body, confirmed that it appeared the market was losing momentum, but he wasn’t all doom and gloom.
“Looking beyond the next few months, sales activity is seen as likely to resume an upward trend with prices also moving higher,” he added.
Property prices are indeed expected to rise by the end of the year.
Lettings market remains stagnant but to pick up soon
The same can’t be said for the lettings market though, where tenant demand continues to lie flat. In February it was down 4%. Landlord instructions are down too – by 22% for last month. Admittedly it’s not the most popular time for rentals. In fact, 34% of surveyors said they expected rental prices to rise by the start of the summer.
One of the UK’s biggest mortgage lenders, HSBC, has reduced its mortgage interest rate by 0.25. This brings its standard variable rate down to 6.74% – the biggest drop in two years and a sign that the market may begin to pick up faster again.
The news comes in the light of the recent Halifax report which shows the average property price fell by 0.1% last month, bringing the typical value of a house in the UK to £298,602.
The drop surprised many analysts in the sector who were anticipating an even bigger rise in property. This was mainly down to an increase in the number of buyers trying to push through their house purchase prior to the Stamp Duty deadline on March 31. It also surprised analysts at Nationwide, whose figures have recorded six monthly property price increases in a row, including a rise of 0.4% for February.
Prices still rising year-on-year
Despite the monthly drop, Halifax reported a 2.9% increase for property prices year-on-year.
The building society’s head of mortgages, Amanda Bryden acknowledged there had been a last-minute rush on buying, but said that momentum had already faded by the time February had come around according to their figures. This, she added, was usually down to the time it typically took for a property transaction to go through.
HSBC had dropped its mortgage interest rate after the Bank of England introduced a rate cut of 0.25% last month. The latter is also expected to carry out two further interest rate cuts of 0.25% by the end of the year.
Net mortgage Lending increases
Meanwhile, figures from the Bank this week shows net mortgage lending in January was the highest its been since September 2022.
In terms of regional variations from the Halifax report, house prices in Scotland had increased by 3.8 per cent in February, with the average property now worth £213,014. In Northern Ireland homeowners saw a 5.9% increase, to £205,784 for a typical property there.
The rush to purchase property before the Stamp Duty cut-off next month is reflected in recent house price growth.
According to the Nationwide Building Society, property prices in the UK jumped 0.4% between January and February. And that figure is expected to increase even higher as buyers attempt to conclude their property transaction before the April 1 deadline. Incidentally, around 25,000 first-time buyers in England are expected to miss it, says Rightmove.
Right now, the average property price in the UK is £270,493, according to Nationwide’s latest findings.
The rise in property prices is the sixth increase in a row and a 3.9% annual rise.
Economist Ashley Webb of Capital Economics, believes it isn’t just the forthcoming Stamp Duty change that is increasing the value of property. The statistics, he said, implied that buyers were undeterred in general. To the extent that…”the housing market continues to shrug off both the weak economy and the recent rises in mortgage rates,” he said.
Flats fall from grace in UK property market
Meanwhile, one area of the market which isn’t faring quite as well as others, is in apartments (or flats). According to Zoopla figures, the values of flats has only grown 7% over the past five years, while houses have gone up by almost a quarter (24%).
Zoopla’s own analysis blames the period during the pandemic when house owners wanted more space, preferably houses with a garden. Its spokesman says the market in flats still hasn’t recovered from this. This is compounded with the fears over poor cladding in recent years.
Rightmove 4th most popular website in UK
Meanwhile, a report by online property portal Rightmove showed that a total of 16.4bn minutes was spent viewing properties on its website last year. That was a 6% increase on the previous year, and resulted in the portal being the fourth highest website in the UK for hits. Only the BBC, Reach newspapers and the government’s own website received more visits in the past 12 months.
Property prices grew 4.6% in December year-on-year, according to official government figures.
Published this week the HM Land Registry price House Price Index also showed an annual increase for November, albeit quite a bit lower at 3.9%.
The figures recorded the average property in the UK at £268,000 for the last month of the year. In terms of price increases, three areas stormed ahead – Northern Ireland, Scotland and the North East. House prices there grew 9.0%, 6.9% and 6.7% respectively.
No rise for London homeowners
That’s in sharp contrast to London where there was no growth year-on-year in December. And, in fact, property prices fell by 0.3% between November and December 2024. The high property prices in London mean that the least affordable areas of London were still higher than many of the more upmarket areas in the North East.
House values also increased in both England and Wales for the year to December 2024. This was at a lower rate – 4.3% in England and 3% in Wales.
Stamp Duty changes expected to impact prices
Analysts believe the property growth figures won’t be as spectacular towards the end of 2025. That’s because more homes are coming on to the market and, at the same time, Stamp Duty costs are reverting to their previous figures. That means having to pay stamp duty on properties priced £125,000 and over. First-time buyers will have to start paying tax on homes up to £300,000 (instead of £425,000). Higher-rate tax payers will also see an increase in capital gains tax, up to 24%.
The market is still expected to be busy however, thanks to a stabilising economy and lower mortgage interest rates. Wages have also gone up over the past year.
Yopa chief executive officer, Verona Frankish, said: “We’ve already seen one interest rate reduction so far in 2025 and it’s shaping up to be a year of even greater positivity where the property market is concerned.”
One in ten estate agents expect to see an increase in property sales over the next few months. At the same time around one third of agents predict they’ll get busier as the year progresses.
The news was garnered from the latest report compiled by the Royal Institution of Chartered Surveyors (Rics), while the growing optimism is down to last week’s cut in interest rates by the Bank of England. A further interest rate cut is expected this year, making mortgage rates even more affordable for prospective buyers.
Mortgage approvals increase 28%
Rics say it’s the ninth month in a row that sales instructions have increased. With an average 25 transactions per agent, it’s the highest figure since the start of lockdown in Autumn 2020. Meanwhile, listings are averaging around 45 properties per branch.
Recent statistics from the Bank of England show mortgage approvals are also on a high – 28% up on the same time the previous year.
Edinburgh is top property investment city
Meanwhile, Scotland’s capital city remains the top city for property investment. This is followed by Glasgow, Manchester and London. The Colliers’ Top UK Residential Investment Cities survey is carried out every six months and shows there has been little movement since last summer.
The biggest mover was Reading. The city fell out of the top 10 but is back at number five, thanks to an increase in new business in the area. Conversely, it was a lack of new business that caused Oxford to fall from fifth to ninth in the list. The other nations were represented by Belfast (in seventh position), and Cardiff in tenth.
Andrew White, head of UK residential at Colliers, said: “…there’s been a period of stability in the UK housing market, with locations that have been sure investments in recent times remaining at the top.”
The report looks at 20 cities in the UK, grading them against indicators such as population growth, leisure facilities, GDP, infrastructure, the number of multinational companies and EPC rankings for private rentals.
Private landlords in England and Wales could end up forking out thousands of pounds in order to get their properties compliant with new government energy efficiency rules.
Under the government’s Plan for Change initiative all private rental properties will have to meet minimum energy standards by 2030. Government analysts say the costs to upgrade to a new Energy Performance Certificate (EPC) level ‘C’ will cost landlords anything from £6,100 to £6,800.
The proposal is currently out to consultation, with landlords and renters urged to make their feelings known.
A spokesman for the Department for Energy Security and Net Zero said the move could benefit renters by cutting back their fuel bills to the tune of £240 a year.
Landlords to look at solar panels and cavity wall insulation
In order to remain complaint with the proposed legislation landlords will have to invest in double glazing, cavity wall insulation and other measures to ensure tenants remain warm in their homes. Solar panels and smart meters may also be considered.
Deputy Prime Minister and Housing Secretary Angela Rayner said: “Through our Plan for Change we are driving up housing standards, improving quality of life, and slashing energy bills for working people and families.
Ed Miliband, Energy Secretary, added: “These plans will also make sure that all private landlords are investing in their properties, building on the good work of many to upgrade their homes to Energy Performance Certificate C or higher already.”
Nearly half of landlords already compliant
The good news is that around 48% of private rental homes are already compliant with the new proposed government standards. The current EPC standard for private rental properties is ‘E.’
One of the proposals in the consultation is whether to give landlords an additional two years after the 2030 cut-off to get up to standard. Another is to limit the cap for landlords to a cost of £15,000 per property, while a third is to introduce an affordability exemption, limiting the cap to £10,000, for a property with a lower rent or a reduced council tax band.
Nationwide’s latest figures show a monthly rise in property prices of just 0.1% for January this year. That’s lower than previously predicted and an indicator that the cost of living and higher mortgage interest rates are still impacting would-be buyers.
Despite this, the figure is still 4.1% higher than house prices a year ago. It brings the cost of the average UK property to £268,213, according to the mortgage lender. Nationwide predict prices to rise by between 2% and 4% this year.
Only last week, data from online property portal Zoopla showed that January 2025 was already faring better than January 2024 and 2023. Demand was up 13% and 10% more properties were available for sale.
Quarter percentage cut expected to loosen mortgage rates
In terms of mortgage interest rates, analysts a predicting a quarter percent cut in the Bank of England base rate this Thursday. That would bring the figure to 4.5%. A total of three interest rates cuts are expected by the end of the year, so that affordability should improve for many house buyers. Certainly, current mortgage interest rates are nowhere near the 6.22% they reached in the summer of 2023, yet the 1.1% of summer 2021 remains a distant dream for many.
The market is currently experiencing a surge in sales, thanks to the rush to beat the Stamp Duty changes on April 1. Then, buyers will have to pay Duty on properties which are less expensive than at present. Meanwhile, property costs are historically high compared to earnings. The current property-wages ratio is 5.0 whereas typically the average is 3.9.
Fewer home owners amongst younger demographics
Figures from the latest English Housing Survey by the Ministry of Housing, Communities and Local Government (MHCLG), showed around 65% of homes were privately owned last year. Of those though, there was a significant drop in ownership between those aged 25 to 34 and 35 to 44, compared to two decades ago.
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