A Sneak Peek into the UK Property Market in 2024

Welcome to the future of the UK property market! As we head into the year 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 Miller Town and Country 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 has 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) this month, falling to £355,177. However, this price drop in newly marketed property is marginally more than the typical December fall over the last two decades, with an average of -1.5%. The current drop is largely due to new sellers setting lower prices to outcompete, acknowledging a shift to a buyers’ market.

This drop led to a close in 2023 with average asking prices 1.1% lower than last year. Higher mortgage rates were a significant obstacle for potential buyers last year, 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, as 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.
•    According to Zoopla, there will be a decrease of around 2% in the average house price for 2024.
•    Lloyds Banking Group also forecasts a 2.4% dip next year, with a recovery expected subsequently.
•    Henry Pryor, a housing market expert and buying agent, expects a slight slump of approximately 3% throughout the year.
•    Rightmove's forecast anticipates new seller asking prices will dip nationally by 1% come the end of 2024.
•    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.
•    Lastly, the Office for Budget Responsibility paints a more drastic picture. Their prediction is for a price drop of 4.7% in 2024, with recovery to the 2022 peak unlikely before 2027. Despite forecasting a sizeable 10% fall from 2022's high in their March 2023 projection, we've yet to witness such a dramatic downturn materialise.

Rightmove's property expert Tim Bannister says: “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 fateful 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.

With this in mind, the steady escalation in wages that has been occurring will be a key driver of housing affordability in 2024. To provide context, the mean mortgage rate has seen a downturn for 20+ 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 next year, driven by the aspiration for spacious homes. 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 Tavistock, Okehampton and the surrounding areas and you would like a local perspective on how the property market may impact your sale or purchase, contact our team at Miller Town and Country today. Our friendly teams in Tavistock and Okehampton will be happy to chat things through with you.