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Fears of a protracted slump in the UK housing market have been eased by some tentative signs of recovery. In January, new seller prices rose by an average of 0.9%, the first positive change for six months. Overall, house prices fell by an average of £4,000 during 2023, according to The Guardian. 

The drop in mortgage rates and the expectation that the Bank of England will lower interest rates further later on this year have stimulated growth of house prices during the first six weeks of 2024. This is expected to lead to renewed demand from first time buyers and cash buyers. 

Gabriella Dickens, a UK economist at Pantheon Macroeconomics, said: “We expect the official measure to follow the Nationwide measure and start to rebound, as the fall in mortgage rates and recovery in real incomes boosts affordability.”

During 2023, the average rental costs increased rapidly, and they are expected to continue to rise in 2024 due to increased demand and low availability of rental properties. 

The Office for National Statistics said: “Private rental prices paid by tenants in the UK rose by 6.2% in the 12 months to January 2024, unchanged for the second consecutive month. Within England, London had the highest annual percentage change in private rental prices in the 12 months to January 2024, at 6.9%, while the north-east saw the lowest, at 4.7%.”

Meanwhile, it is anticipated that the forthcoming Spring Budget will offer some support for the first time buyer sector, after the Help to Buy scheme was wound down. Any new measures will help some current renters to take their first step on the property ladder.

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