House prices in the UK are seeing a positive trend, with a rise for the first time in two years according to surveyors. In September, a balance of 16% of professionals reported an increase in prices, a significant improvement from the 0% in August. This marks the first positive reading since October 2022.
Not only are prices going up, but demand, sales, and new listings are also on the rise. The Royal Institution of Chartered Surveyors (Rics) reported a net balance of 14% of property professionals seeing an increase in buyer demand in September. Additionally, a balance of 5% witnessed a rise in sales, with 23% expecting further increases in the next three months and 45% predicting a rise in the next 12 months. A balance of 22% of professionals also reported an increase in new listings.
The speculation surrounding a potential increase in capital gains tax has motivated some individuals to list their properties for sale, according to the report. Tarrant Parsons, Rics head of market analytics, expressed optimism about the housing market activity. He mentioned that the easing mortgage interest rates are supporting the recovery in buyer demand and that further monetary policy adjustments are anticipated in the coming months, creating a more favorable market environment.
In the lettings market, demand continues to surpass supply, with professionals noting a decrease in property supply and an increase in tenant demand. This imbalance is partly due to some landlords listing their properties for sale before anticipated capital gains tax hikes. The average cost per square foot for a UK home is now around £300, with significant variations across regions. For instance, Hartlepool has the lowest cost at £118 per square foot, while Kensington and Chelsea in London top the list at £1,373 per square foot.
Zoopla’s senior property researcher, Izabella Lubowiecka, emphasized the importance of considering square footage when evaluating a property. Understanding the cost per square foot can help buyers determine if a property offers the desired space and if the price is justified.
Rics president Tina Paillet highlighted the ongoing challenges faced by renters, with demand consistently surpassing supply in the rental market. While reforms like the Renters’ Rights Bill aim to enhance standards and protections for tenants, there is a need to ensure that responsible landlords are not discouraged from remaining in the market.