Strong Surge in Sale Agreed Property Prices Boosting UK Real Estate Investment

In a highly encouraging development for property investors in the UK, exchanged property prices have witnessed a remarkable upswing, by an impressive average of 3.8% over the past year. This surge represents an astonishing 22% increase since 2019, translating to a robust compound annual growth rate (CAGR) of 4% per annum, as per recent data unveiled by property data firm TwentyEA.

Of notable significance is the revelation that the disparity between initial asking prices and the prices at which properties are eventually exchanged remains nearly unchanged in 2023 compared to four years ago. This phenomenon underscores the remarkable stability and consistency in the market dynamics over this period.

Delving into regional nuances, a comprehensive analysis reveals that four out of England's ten regions have triumphed with growth rates in exchanged property prices of 5% or more in the current year when contrasted with 2022 figures. This trend extends beyond England's borders, with Northern Ireland and Scotland demonstrating similar positive trajectories. Northern Ireland has emerged as the front runner, witnessing an impressive 8.4% growth in exchanged property prices. Notably, regions including the South West, inner London, East of England, the North West, and Scotland have all achieved exchange price growth exceeding 5%.

A broader panoramic view reveals that every region across the UK has recorded gains of at least 3%, with the exception of Wales and the West Midlands, which reported a comparatively lower exchanged price growth of 2.5%.

When assessing instruction prices year on year, the Northern Ireland property market shone, registering the highest growth rate of 7%. The North West, Scotland, and Yorkshire and the Humber also made considerable strides, with growth rates of 5.7%, 5.7%, and 5.1% respectively.

For the average property, the growth witnessed in the past year amounts to a significant £13,000, further compounded by an impressive £64,000 since 2019. These numbers exemplify the tangible and substantial gains that real estate investors have enjoyed during this period.

Expanding our lens, the broader trajectory of asking prices at the point of initial instruction reveals an average increase of 2.8% in the past year alone and a substantial 24% uptick since 2019. This translates into a commendable compound annual growth rate (CAGR) of 4.4% per annum.

In response to these exhilarating trends, Katy Billany, the executive director of TwentyEA, conveyed her optimism, stating, "Despite the prevailing pessimistic narratives that have dominated headlines in recent months, both instruction and exchanged prices have demonstrated unwavering growth throughout the UK. This trend, witnessed across England's ten regions, Scotland, and Northern Ireland, speaks volumes about the tenacity of buyer demand, which has persevered despite the challenges posed by high inflation and escalating interest rates."

A parallel development of considerable significance is the notable decline of over 6% in the volume of property transactions that have fallen through since March this year. This decrease has nearly brought this figure in line with the pre-pandemic levels observed in July 2019. This shift underscores a market that is increasingly resilient and adaptable.

Moreover, the 'time to exchange,' which denotes the duration taken for property transactions to be finalized, has demonstrated a steady reduction month after month since February, culminating in a remarkable decline to 113 days in July. Katy Billany highlighted this encouraging trend, stating, "Analyzing the volume of 'fallen through' transactions over the past year, it is noteworthy that only Scotland experienced an increase. The property market's lower-priced segment, properties valued under £200,000, has notably become less susceptible to transaction cancellations compared to the previous year. The continued reduction in 'time to exchange' further bolsters our optimism for the market's trajectory."

In summation, the UK property investment landscape shines brightly, underscored by a notable surge in exchanged property prices. This robust growth, coupled with declining transaction cancellations and shorter transaction timelines, paints a picture of resilience and positivity for property investors across the nation.