As we enter into 2024, many are wondering what lies ahead for the housing industry. Will prices rise or fall? Will there be a shift in demand for certain types of properties? These are just some of the questions that homeowners, investors, and potential buyers are eager to have answered. At Page & Co, we have put together a sneak peek into the UK property market in 2024. We'll discuss some of the potential trends and changes that may shape the industry.
How 2023 ended
Rightmove's December 2023 House Price Index, recently made public, provides insight into the year's closure. As per Rightmove's report, average asking prices for new sellers have decreased by 1.9% (-£6,966) in December, falling to £355,177. However, this his price drop in newly marketed properties is marginally more than the typical December fall in the last two decades, with an average of -1.5%. The current drop is largely due to new sellers setting lower asking prices in order to attract more interest, acknowledging a shift to a potential “buyers’ market”.
This drop has led to a close of the year with average asking prices 1.1% lower than last year. Higher mortgage rates were a significant obstacle for potential buyers in 2023, and the issue of affordability remains. Nonetheless, there are indicators of increased activity from family movers, who previously postponed their plans due to the mini-budget aftermath, therefore, the market heads towards more stability in 2024.
What will happen to house prices?
With regard to property value predictions for 2024, are we to expect a continued downturn? It seems probable. Yet, what might be the magnitude of this decline? Let's examine the insights offered by the sector's experts;
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According to Zoopla, there will be a decrease of around 2% in the average house price for 2024.
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Lloyds Banking Group also forecasts a 2.4% dip this year, with a recovery expected subsequently.
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Henry Pryor, a housing market expert and buying agent, expects a slight slump of approximately 3% throughout the year.
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Rightmove's forecast anticipates new seller asking prices will dip nationally by 1% come the end of 2024.
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David Hollingworth, an associate director at L&C Mortgages, shares the view that there will be a reduction in prices, albeit not a substantial one.
Rightmove's property expert Tim Bannister said at the end of last year: “It’s likely to be another muted year for the market, however the better than anticipated activity this year has shown that many buyers are still getting on with satisfying their housing needs. We predict a modest average 1% fall in new seller asking prices in 2024. The underlying level of good demand at the right price makes it unlikely that we will see a more significant drop in prices next year.”
Mortgage rate predictions
The prognosis for the mortgage landscape in 2024 paints a more placid picture compared to a year ago, when financial markets were still recuperating from the upheaval sparked by former Prime Minister Liz Truss’s mini-budget. A respite in fixed-rate mortgages has been evident for some time, propelled by inflation figures surpassing predictions and the broad-based anticipation that the pinnacle of interest rates was reached at 5.25%, a deduction arrived at following the Bank of England’s verdict to maintain the benchmark rate unchanged for the second instance in November 2023.
Despite a softened stance on fixed-rate mortgages, expectations hint towards persistently higher rates into 2024, with a downward adjustment to 4.5% potentially only visible in the second half of the year. This forecast suggests that an improvement in housing affordability is largely dependent on individuals augmenting their income levels.
With this in mind, the steady escalation in wages stands to be the central pivot sustaining the transaction volume within the housing market for 2024. To provide context, the mean mortgage rate has seen a downturn for 19 uninterrupted weeks, positioning the average 5-year fixed mortgage rate at 5.11%, in contrast to the 6.11% witnessed in July. It is forecasted that more movers will emerge this year, driven by the aspiration for more spacious homes or possibly more outside space. Those who hit the pause button on their plans following the mini-budget to scrutinise the year’s progress may now feel heartened to take action.
Thinking of moving
If you’re thinking of moving home in or around Canterbury in 2024. You will need a local, knowledgeable agent who understands how to work in a more difficult market and will go the extra mile for you. If you would like to have a no-obligation chat about how the Kent property market will impact your sale or purchase, contact our friendly team at Page and Co on 01227 472000 or email sales@pageandco.co.uk.
