UK house prices predicted to decrease in 2024, according to analysts and lenders, while the cost of renting will continue to rise.
The government's official forecasters has said property prices were most likely to drop by nearly 5%.
Pricing will be crucial if you’re selling a home in 2024
Agreed sales are now 10% lower than they were at this time in the ‘normal market of 2019’. Throughout 2023, there were price reductions of 39% of properties compared to 29% in 2022 and 34% in 2019.
The average time it takes to find a buyer has gone up from approximately 45 days in 2022 to approximately 66 days currently, however, if competitive on price they have been able to find someone quicker.
It is recommended to work with your estate agent to not start too high. If you start with a competitive price, you shouldn't have to reduce it further down the line.
Mortgage Rates
Since July 2023, mortgage rates have fallen regularly. This has provided more stability and certainty about the type of mortgage offer they are likely to receive as well as the cost of it. The average 2-year fixed rate is currently at 5.48% and the average 5-year fixed rate is at 5.07% (as of 12th December 2023).
The current market is much calmer now compared to recent events albeit still high. It may now be a better time for houses to return to the market after being pushed back during 2023.
According to BBC News -
The UK's biggest building society, the Nationwide, said the housing market was likely to be subdued next year.
"If the economy remains sluggish and mortgage rates moderate only gradually, as we expect, house prices are likely to record another small decline or remain broadly flat over the course of 2024," said Robert Gardner, Nationwide's chief economist.
More specifically, he forecast UK house prices would remain unchanged or fall by up to 2% on average in 2024. The government's official forecaster, the Office for Budget Responsibility (OBR), said at the time of the Autumn Statement in November that it expected house prices to drop by 4.7% in 2024.
The Halifax, part of Lloyds Banking Group - the country's biggest mortgage lender, has forecast a fall of between 2% and 4%, but highlighted the same reasons.
"With the combination of cost of living pressures and interest rate levels that are still much higher than even two years ago, we will likely see continued mild downward pressure on house prices," said director, Kim Kinnaird.