Will house prices go down in 2024?

According to Halifax, house prices are anticipated to experience a decline of up to 4% in the coming year. The impact of persistently high interest rates on mortgage affordability and sale completions is said to be a primary factor contributing to this potential downturn.

It is presumed that the combination of cost-of-living pressures and interest rates remaining considerably higher than they were two years ago could push down house prices in 2024. Despite a relatively resilient performance this year, with prices falling only 1% to an average of £283,615, Halifax attributes this to a shortage of available homes rather than robust buyer demand.

Alternatively, Nationwide, the UK's largest building society, says there will be a "low single-digit decline" in house prices for 2024 but suggests that they might remain "broadly flat." 

However, there is a regional diversity in house price movements, with the south-east of England experiencing a 5.7% decline, while Northern Ireland saw a 2.3% increase. The scarcity of competitive mortgage deals led to a 25% drop in approvals over the past year, coupled with a 20% decrease in overall sales completions marking the lowest levels in a decade.


Another crucial aspect impacting the market is mortgage rates. Any fluctuation in these rates can influence buyer affordability and, consequently, demand in the housing sector. It's essential to monitor these rates as they directly impact buyer behaviour.

However, there is a glimmer of optimism as Halifax anticipates a partial recovery in the housing market in 2024. As inflation recedes and financial markets factor in potential cuts to the Bank of England base rate, improvements are expected. With mortgage rates already on the decline, falling below 5% for a typical five-year fixed 75% loan-to-value deal, further reductions are predicted in the coming months.

According to insights from property experts and data analysis by Rightmove, the forecast for 2024 suggests a potential 1% dip in average new seller asking prices nationwide by the end of the year. This projection stems from increased competition among sellers trying to secure buyers in a market returning to more standard levels of activity post-pandemic.

For those contemplating selling their homes in 2024, the key lies in pricing. Current statistics reveal a 10% decrease in the number of sales compared to the more stable market of 2019. Moreover, a significant portion (39%) of properties experienced asking price reductions during marketing in 2023.

The trajectory of UK house prices in 2024 remains uncertain, with conflicting forecasts from leading institutions. The intricate interplay of economic factors, inflation rates, and interest rates will ultimately shape UK housing market. 

 

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