Housing Market: Key Economic Indicators
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Loading... - Layla Mido
- 22 Jul 2024
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The UK housing market has experienced varied changes in house prices, mortgage approvals, and construction activities over the past year. Here are the key economic indicators:
House Prices
- Annual Increase: House prices, as measured by the UK House Price Index, increased by 2.2% between May 2023 and May 2024.
- Monthly Increase: On a seasonally adjusted basis, average house prices increased by 0.6% between April 2024 and May 2024.
Regional Variations:
- House prices grew fastest in Scotland, Northern Ireland, and the North West.
- House prices fell in London and the South East.
Note: Northern Ireland's house prices are measured over the year to quarter 1 of 2024.
Mortgage Approvals
- Pandemic Impact: Mortgage approvals for house purchases hit a record low in May 2020 due to the lockdown. Approvals increased significantly towards the end of 2020 but have since declined.
- Year-on-Year Increase: In May 2024, mortgage approvals for house purchases were up 19% compared to May 2023.
- Monthly Decrease: Mortgage approvals in May 2024 were down 1% from April 2024.
- Approval Numbers: There were 59,991 mortgage approvals in May 2024, compared with 50,340 in May 2023.
Housing Starts and Completions
Pandemic Impact: Housing starts and completions fell sharply in Q2 2020 due to the coronavirus lockdown but have since increased.
Housing Starts:
Q1 2024: 22,310 house building starts (seasonally adjusted) in England, an 11% increase compared to the previous quarter.
Year-on-Year Decrease: A 41% decrease compared to Q1 2023, due to house builders accelerating project starts to avoid new regulatory standards introduced on June 15, 2023.
Housing Completions:
Q1 2024: 34,630 house building completions (seasonally adjusted) in England, a 12% decrease compared to both the previous quarter and Q1 2023.
The UK's housing market shows a mixed picture with rising house prices in some regions and falling prices in others. Mortgage approvals have seen fluctuations with a recent increase year-on-year but a slight monthly decline. Housing starts and completions are higher than during the pandemic but show a notable decrease compared to the previous year due to regulatory changes.
