What Does The UK Housing Market Have In Store For 2024?
The UK housing market has been through a turbulent time during the past few years, as demand soared during the pandemic and then dipped during 2023. The atmosphere of uncertainty has led to house prices falling for the first time in 11 years, according to the latest data from the Office for National Statistics (ONS).
The ONS reports that the average cost of a UK home is now £291,000, which represents a 0.1% drop in the year since last September. As ever, there is a strong regional variation in average house prices, with London prices falling by 1.1% over the same period to reach an average of £537,000, compared to a rise of 1.6% in the northeast, to £163,000.
The drop in house prices was largely predicted, following the inflated prices that were seen during the pandemic and the surge in interest rates that led to spiralling mortgage costs during the latter months of 2022 and into 2023.
Recently however, major lenders including Halifax and HSBC have dropped interest rates on some five-year fixed deals, with some rates now back down below 5%. Sarah Coles, the head of personal finance at the advice company Hargreaves Lansdown, told The Guardian that the fall in house prices had been expected.
She said: “The market has proved incredibly resilient in the face of overwhelming headwinds, but mortgage rate hikes over the summer dealt the final blow, pushing prices into negative territory. Even if these price drops don’t take hold, it’s still a really horrible time to be trying to sell a property.”
For the final quarter of the year, sellers have been pricing their homes more competitively in order to attract more buyers. This is traditionally a quieter time of the year as people tend to be more focused on festive events than house hunting, and may put any plans to move on hold until next year.
So what does 2024 hold for anyone looking to buy or sell a property? According to Today’s Conveyancer, the market is likely to be fairly stagnant during the next year. However, there is some positive news, especially for first time buyers.
Falling house prices accompanied by rising incomes and lower mortgage interest rates mean that affordability is likely to improve, helping more people to take their first step on to the property ladder.
It is not all bad news for sellers either, as although house prices are expected to fall modestly, most property market experts believe that there will be no major collapse in prices.
Therefore, although the property market will be cooling off, it will be more of a return to business as usual after the unprecedented conditions that we have seen over the last few years.
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