A return to growth was fuelled by £88.3 billion spent in the second quarter of 2024, which represented a £6.6 billion (8%) increase on the same three months last year
The UK housing market has returned to growth, according to the latest research from Savills. Spending on house purchases edged back above £350 billion in the year to the end of June – meaning that the size of the UK housing market is now slightly bigger than its pre-pandemic average.
A return to growth was fuelled by £88.3 billion spent in the second quarter of 2024, which represented a £6.6 billion (8%) increase on the same three months last year.
The jump in spending was fuelled by a 22% rise in the amount of mortgage debt funded by lenders, as stability returned to the mortgage markets.
Total spending by FTBs exceeded £21 billion in the quarter; a £4.1 billion rise year-on-year. Overall, FTB activity accounted for 24% of all spending in the market, the highest proportion in eight years.
Meanwhile spending by cash buyers, which accounted for 43% of all spending in the housing market in 2023, declined by nearly £2 billion to 39% of total spend in the second quarter of 2024.
Lucian Cook, head of residential research at Savills, said: As interest rates continue to drop, we can expect to see the size of the housing market expand further over the next 12 months. Lower mortgage costs will encourage a wider range of buyers back to the housing market.
In particular, we should see an rise in upsizers who put plans to trade up the housing market on hold in the face of higher mortgage costs. This cohort is likely to be at the forefront of that growth, although some may wait until after the government’s October budget before taking the leap, he said.