UK Housing Market Rebounds to Pre-Pandemic Levels: Savills Report

The UK housing market has shown a strong recovery, with the latest research from Savills revealing that it has now surpassed its pre-pandemic levels. According to the data, spending on house purchases reached over £350 billion in the year leading up to June 2024, marking a significant milestone in the market's resurgence.

In the second quarter of 2024 alone, a total of £88.3 billion was spent on house purchases, an increase of £6.6 billion (or 8%) compared to the same period last year. This growth has been largely attributed to a 22% increase in mortgage lending, as the market stabilised following recent fluctuations in interest rates.

First-time buyers played a crucial role in driving this growth, with spending from this group exceeding £21 billion in Q2 2024, representing a £4.1 billion rise compared to the previous year. First-time buyers accounted for 24% of all spending in the housing market, the highest share in eight years.

However, cash buyers, who represented 43% of all spending in 2023, saw a decline. Their contribution fell by approximately £2 billion, now accounting for 39% of total spending in Q2 2024.

Lucian Cook, head of residential research at Savills, commented on the positive outlook for the market: "As interest rates continue to ease, 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 increase in upsizers who had previously put plans on hold due to higher mortgage costs. This group is likely to be at the forefront of market growth, although some may wait until after the government’s October budget to make their move."

The table below provides a detailed breakdown of the UK housing market’s performance in Q2 2024 compared to the same period in 2023:

The data highlights the resilience of the UK housing market, driven by strong demand from first-time buyers and increased mortgage lending. As interest rates continue to stabilise, the market is expected to see further growth, making it an attractive prospect for both homebuyers and investors alike.