Property Market Forecast 2024 UK

Competitive Pricing

Rightmove’s property market forecast for 2024 estimates an average house price fall of 1% in new seller asking prices. This will be due to increased competition against the affordability pressures, with sellers determined to secure a buyer.

Tim Bannister, Rightmove’s property expert, agrees that there will be more competitive pricing in 2024. It will likely be “in areas where sellers are struggling to attract affordability-stretched buyers, or needing to sell quickly due to a change of circumstance, new job opportunity, or strong desire for a lifestyle change.”

Are House Prices Likely to Fall in 2024?

The current house price fall is expected to carry into next year as repricing continues to balance to normality. Experts believe that a good level of demand will make significant price drops unlikely. House price fall predictions, in general, are looking modest.

Zoopla predicts inflation for house prices in 2024 to reach an average of -2.0%. As for house price predictions for the next 5 years, Savills has its own estimates. There will be a house price fall of 3% in 2024, but it will increase as affordability concerns ease through 2025 to 2028. By 2028, house prices are estimated to be approximately £45,000 higher while market demand recovers alongside buying power.

Will Mortgage Rates Go Down in 2024?

Now that the BOE base rates have peaked, the property market outlook has improved. Buyers who held off moving house this year may resume their plans at the start of 2024. While these buyers can better plan for what is affordable for them, however, affordability in general for many buyers could remain stretched at the start.

However, these cuts and lower rates will not be as sudden as their climb in July 2023. In our property market forecast for 2024, mortgage rates will likely remain high for at least the first half of the year. This will limit some buyers’ spending power and delay their return to the market. However, financial experts predict the BOE will begin lowering the base rate close to the summer of 2024, which will aid the influx of returning eager buyers.

Zoopla predicts mortgage rates to reduce to an average of 4.5% by 2025, which will lead house prices to climb by 2% and increase sales above 1 million.

Rental Growth

Zoopla predicts rental growth to decelerate over 2024. This involves the market finding a balance between affordability pressures and growing supply. There will be a normal slowdown as we pass from 2023 into 2024. However, rental growth is forecast to slow from the current +9.7% to +5% by December next year. And, according to a 5-year forecast for rental prices estimated in October, a 22.2% total rent increase is expected by 2027.

London will lead the way in the rental growth slowdown over 2024, due to affordability pressures, as income and supply balances.

Demand

Rental demand in the UK is currently 11% lower YoY. However, this figure is 32% higher than the 5-year average. While the imbalance of supply and demand will not vanish next year, the property market forecast for 2024 rentals is looking to be more balanced than they have been in the last 3 years.