Inflation-busting house price growth sweeps the UK

New market analysis by peer-to-peer real estate investment platform, easyMoney, reveals that the proportion of UK local authority districts to see house price growth outpace inflation has grown from 2.8% to 44.2% in the past year.

easyMoney has compared average annual house price growth* to the rate of inflation (CPIH)* in June 2023 and June 2024 (latest available) to reveal how the market has strengthened over the last year when it comes to the number of local authorities home to an inflation busting housing market.

After a prolonged period of economic headwinds, the UK economy is starting to show signs of recovery and growth and the current 2.8% rate of inflation is close to the Bank of England's target of 2%. At the same time, house prices have not only stabilised, but are showing strong signs of growth, with the latest UK House Price Index recording a fifth consecutive month of monthly growth, and a fourth consecutive month of annual growth.

As such, the UK's housing market has seen massive improvements.

The analysis by easyMoney shows that a year ago, the annual rate of UK house price growth sat at just 0.01%.

Today, however, the average UK house price is up by 2.73% on an annual basis. Not only is this a huge improvement on the previous year, but it puts national price growth within touching distance of the rate of inflation (CPIH) which, as of June 2024, stands at 2.8%.

On a regional level, six of 12 regions have actually seen house price growth outperform the rate of inflation over the past year.

The two leading regions are Yorkshire & Humber where prices have grown by an average of 4.66%, and Northern Ireland where they're up 6.39%. Inflation beating house price growth has also been seen in Scotland (4.26%), the North East (4.19%), North West (3.73%), and West Midlands (3.12%).

More proof of the market's improving performance is revealed by further analysis from easyMoney showing that a year ago, there were just 10 UK local authority districts in which average house price growth outpaced inflation, equivalent to just 2.8% of the national market.

But today, this number has increased to 159 local authority districts, which means 44.2% of the market has seen housing market performance exceed inflation.

The best performing local authority districts are North East Derbyshire where prices have increased by an average of 15.73% in the past year, and Stratford-on-Avon where they're up 11.12%.

This is followed by High Peak (10.58%), Oxford (10.35%), Cheshire East (10.17%), and Cherwell (9.52%).

Jason Ferrando, CEO of easyMoney says:

"The UK has spent the past few years under the cloud of economic uncertainty, high inflation, soaring interest rates, and a significant cost of living crisis. Even so, while many experts predicted this difficult period would result in a house price crash, the market proved itself to be incredibly resilient and rather than fall, house prices simply remained static.

Now that inflation is falling, we've started to see prices increase at great pace and without hesitation, with significant growth already seen across much of the market.

Over the past decade or so, the UK housing market has proven itself time and time again to be incredibly strong in the face of economic headwinds. As an investment asset, there are very few things, if any, that are more secure and more prosperous than property."