UK housing market remains steady as inflation reaches target and interest rate cut looks likely soon

UK inflation fell to 2% in May, reaching the Bank of England’s target for the first time in almost three years. And while the Bank of England voted to keep interest rates at 5.25% earlier in June, an interest rate cut looks likely soon, possibly in August.

In fact, former Chancellor Jeremy Hunt recently said that the UK’s inflation rate was now lower than ‘nearly all’ major economies.

Has the general election impacted the UK housing market?

Most industry experts have reported that the upcoming General Election on July 4th will not impact the housing market, with little effect on either house prices or buyers’ plans.

In fact, after a General Election we often see an uptick in activity. We recently analysed data relating to General Elections over the last 40 years (nine in total), and in all but one, house prices rose by over 5% over the following 12 months.

What is the broader economic outlook?

For most purchasers wider economic trends are more important than politics; their priorities tend to be the economy, the jobs market and overall affordability. A buyer’s individual circumstances dominate purchasing decisions, with falling inflation and interest rate cuts the key influences at the moment.

Rightmove data appears to back this up; they reveal that over the last four weeks, the number of sales being agreed has remained steady at 6% higher than a year ago, with buyer demand now 5% higher than last year. They conducted a poll of over 14,000 people, with 95% of those planning to move home saying that the election would not affect their plans.

London property market remains steady

This is reflected in our own data, with new instructions increasing, enquiry levels rising and transactions forging ahead as planned.

According to Rightmove, properties in London had an overall average price of £697,607 over the last year. The majority of sales in London were flats, selling for an average price of £535,452.

Overall, Rightmove reports that sold prices in London over the last year were similar to the previous year and 7% up on the 2021 peak of £652,811.

Benham and Reeves’ international offices continue overseas property events

Our international property events are attracting interest from overseas clients, from viewing trips to one-to-one investment advice sessions.

Hong Kong team accompanies clients on London trip

Our Hong Kong team is accompanying clients on escorted trips to London this summer, offering tours of London’s most exciting developments, hand-picked by our team to suit specific requirements and budgets.

Register your interest here

Bangkok team highlights Wandsworth Mills, SW18

Our Bangkok team is continuing one-to-one discussions with clients, showcasing Wandsworth Mills, SW18. This development combines high spec apartments, landscaped green spaces close to the River Thames, only 13 minutes from Waterloo station.

Click here for more information.

Malaysia office showcases new developments close to London’s top universities

Our Malaysia team is showcasing developments near London’s top universities, ideal for investors looking for strong rental income, or parents looking for a London home for student children.

India team completes successful showcase of Royal Gateway, W3

Our India team has seen a lot of interest in Royal Gateway, North Acton, West London, following their recent events in Delhi and Mumbai which have led to a number of offers from investors already. This beautifully designed Barratt London development is just an eight minute walk from Acton mainline (Elizabeth Line) station, providing easy access to central London.

Find out more here.

For more information on any of these property events, talk to your local office.

Strong competition for London rental properties

Demand for rental properties in London remains high, with around 14 applicants for every property. But we are starting to see a more balanced picture now, as the frenetic post-Covid supply and demand issues diminish.

However, London is still experiencing a chronic shortage of rental properties and demand remains strong. This is unlikely to change significantly, despite numerous developments launching across London this year, which is starting to ease housing stocks, but only slightly.

Rents in London rose by 3.7% in London over the last year, according to Zoopla, although here at Benham and Reeves we are seeing most rental properties snapped up quickly, which means landlords see minimal voids, boosting rental yields.

The London rental market is seasonal and we have already started to receive increasing numbers of enquiries from international students starting university in September/October as well as new graduates moving to London.

Do you own a rental property close to one of London’s top universities?

We are currently carrying out rental valuations for landlords, ready for this surge in demand in late summer.

So please get in touch if you would like to arrange a valuation of your rental property.

The London rental market is complex and highly nuanced so a local, expert opinion is vital to gain an accurate picture and so help you achieve the highest rent.

Contact Benham and Reeves if you are buying, selling or renting a property in London

Contact your nearest branch if you are buying, selling or renting a London property. We have 21 branches across London, many of which are located in highly sought-after developments.