The average rate of house price growth has risen to a 10-year high in Wales, Yorkshire & the Humber and the North East, and is very close to a decade-high in the North West and Midlands too – as shown in the chart below.

These are some of the most accessible housing markets in the UK in terms of affordability, meaning there has been more headroom for price growth. Overall price growth may start to ease towards the end of H2, but it remain in positive territory, with the more affordable markets continuing to lead in terms of price uplifts.

Buyer demand peaked in April this year, as more purchasers sought to take advantage of the extended stamp duty holiday, and potential savings of up to £15,000. However, as the chart below shows, while demand has eased from this peak, it is still running well ahead of more ‘normal’ market conditions back in 2019, signalling no ‘cliff-edge’ in activity due to the ending of the initial stamp duty holiday on June 30th. The ‘search for space’ among buyers continues, and tens of thousands will also still benefit from the tapered SDLT holiday to September 30th. 

Rental demand remains higher than the supply of rental property, and this is continuing to push up rental growth across the UK outside London.

Rents are rising at an average rate of 3.6% a year, the highest rate of growth in five years. London, the one region where rents have fallen over the last 12 months is also showing signs of a turnaround. Average rents in the capital are down -7.7% on the year, compared to -9.9% in February this year.

Rental demand is also rising in city centres as offices start to open up and cultural and lifestyle amenities are close to operating as usual, after 15 months of restrictions due to the pandemic. At the same time, investment by private landlords into the rental sector has been constrained for several years, meaning there is a structural supply challenge.

A supply/demand imbalance is supporting rental growth.