The UK property market is undergoing a “muted” recovery, but some areas could see price growth of up to 26.5 per cent, according to a new report from easyMoney.
Meanwhile, new data from global credit intelligence company Pepper Advantage has found that the rate of mortgage arrears is slowing across the UK, from 5.7 per cent in the fourth quarter of 2023, to 3.9 per cent in the first quarter of 2024.
Since the base rate was held at 5.25 per cent for the first time in September 2023, the average house price across Britain has declined at an average rate of 0.3 per cent per month, easyMoney noted.
If this trend were to continue, by December 2024 the average property could have lost 2.6 per cent of its value.
However, easyMoney has identified a number of local authorities across Britain where the housing market is set to grow at a higher than average rate.
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Derbyshire’s Amber Valley district has seen house prices increase by 2.4 per cent per month, putting the area on track for growth of 26.5 per cent by the end of the year. And Darlington has seen an average monthly rate of growth of 2.1 per cent since interest rates were held, which could lead to price growth of 23.7 per cent by the end of 2024.
“After such consistent upward growth, followed by a period of stagnation, it looks to be a far more settled year for the housing market, with property values expected to remain largely flat in 2024,” said Jason Ferrando, chief executive of easyMoney.
“But as is so often the case, you can’t judge a market by its topline statistics. Instead you have to dive down into the local market data to discover that price performance in certain parts of Britain could be far from flat as we move through the year.
“For anyone who is looking to invest in property this year, it’s useful to know which parts of the country are bucking the national trend. Although it can be far less time consuming to opt for an investment vehicle where market experts have already done the hard work in identifying these up and coming investment hotspots.”
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The UK housing market has been in turmoil since Liz Truss’ October 2022 Budget, which sent the base rate soaring, leading to reduced demand for new mortgages and causing a rise in mortgage defaults.
18 months on, the market appears to be stabilising, with mortgage arrears growth in the first quarter of 2024 slowing to the lowest level since the Truss Budget.
Pepper Advantage found that the North East and North West are the only regions in the UK in which arrears increased, while the South East, South West and Greater London had the lowest absolute arrears rates in the UK.
“The slowing growth suggests an increasingly resilient UK economy as lower inflation and higher-than-expected wage increases alleviate pressure on household budgets in some areas,” said Aaron Milburn, UK managing director for Pepper Advantage.
“However, the disparity seen between regions and age groups shows that financial challenges are not evenly spread.
“The Q1 data contains some hopeful indicators, but it is too soon to say if these trends will continue into Q2.”
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