At the start of 2024, the UK housing market experienced a brief surge in activity, but this has since cooled. While house prices dropped by -0.2% in March, annual growth increased to 1.6%, with northern regions like the North East (2.3%) and North West (1.6%) leading the way. London also saw strong quarterly growth (1.6%) as the “race for space” trend continues to reverse.

The initial boost in market activity, spurred by cuts to mortgage rates, is beginning to fade as rates approach late December levels. Although February saw the highest mortgage approvals in 17 months, March activity slowed, with sales agreed just 2% above the 2017-19 average. Completed transactions rose slightly but remained 11% below pre-pandemic levels.

Supply in the market has increased as more sellers list their homes, but higher mortgage rates are dampening demand, potentially slowing price growth. The majority of regions saw house price declines, with the South East and East of England experiencing the largest drops.

The first base rate cut is expected soon, possibly in June, as inflation and wage growth slow. In the rental market, annual growth fell to 7.1% in February, with the strongest increases still seen in Scotland, the North East, and Wales.