Positive signs: UK Property Market to Stabilise in 2024

December 6, 2023

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Article Summary

Buy-to-let
  • According to Rightmove, the average house price is expected to witness a 1% decline across the UK in 2024.

  • Rightmove's 2022 forecast envisioned a 2% decline in average UK asking prices over 2023, but the market has only experienced a 1.3% drop compared to 2022.

  • This shift in momentum could pave the way for a more dynamic and resilient real estate market, benefitting investors.

Introduction

As the UK property market continues its upward trajectory, Rightmove’s latest predictions offer a glimpse into the future, suggesting a smaller price decrease in 2024 compared to the previous year. This forecast indicates encouraging developments and provides insight into the shifting dynamics of the housing landscape.

According to Rightmove, the average house price is expected to witness a 1% decline across the UK in 2024, showcasing a reduction from the current rate of descent. These statistics imply that, while the housing market faces a relatively subdued year in terms of prices, there is a strong likelihood that property values are nearing their nadir, indicating potential price growth in the coming years – a sentiment supported by experts in the property sector.

This also suggests that the window for acquiring an investment property below the typical average price is gradually closing, emphasizing the urgency for potential investors to consider opportunities in the evolving market.

Let’s delve deeper into the Rightmove figures to discern their implications for the UK buy-to-let property market.

UK Housing Market Outlook for 2024: Stable Mortgages and Attractive Properties

Rightmove posits that house prices will experience a 1% dip in 2024 due to heightened competition among sellers vying for potential buyers. The rationale behind this dip is the efforts of sellers to secure buyers, introducing an element of competitiveness into the market. Nonetheless, the platform also predicts that mortgage rates will persistently decrease while remaining elevated throughout 2024. Some forecasts even propose that mortgage rates might fall below 4% by mid-2024.

This insight into mortgage rates is crucial for potential homebuyers and property investors, as favourable rates can significantly impact affordability and influence the decision-making process. Lower mortgage rates often stimulate buyer interest and contribute to increased activity in the real estate market.

Interestingly, Rightmove’s 2022 forecast envisioned a 2% decline in average UK asking prices over 2023. However, the market has defied these projections, experiencing only a 1.3% drop compared to 2022. This decline was fueled by elevated mortgage rates and an inflation rate that has since been halved.

Rightmove further stated that the housing market is undergoing a gradual transition to normal levels after the bustling period following the pandemic, during which people took advantage of the Stamp Duty holiday and reassessed their property needs following an extended lockdown. Explore more about investing in real estate in the UK with our comprehensive guide.

The property platform also disclosed that sellers had raised asking prices by 39% in 2023 – a figure 10% lower than the previous year. This indicates a balancing act between buyer and seller dynamics, with sellers looking to maximize returns in a market that has seen increased activity and competition.

 

Insights into Rightmove’s Asking Price Projections

Tim Bannister, a property expert at Rightmove, commented:

“An average drop of 1% in prices reflects our prediction that it’s likely to be another muted, and in parts challenging, year for some buyers and sellers in 2024.” However, he added: “The better-than-anticipated activity this year has shown that many buyers are still getting on with satisfying their housing needs, and there is considerable opportunity for sellers and their agents to attract these buyers with the right pricing.”

The latest news on UK house prices adds to the mounting evidence of the UK market recovering from a period of high-interest rates. For instance, Nationwide recently released its latest house price index (HPI), revealing a month-by-month price increase of 0.2% – the third such increase in 2023.

Moreover, a separate Zoopla report suggested that the property market is currently in the strongest position for buyers since 2018. This aligns with the narrative of a market rebound, creating opportunities for both buyers and sellers.

Conclusion

After a period of considerable uncertainty, the UK housing sector seems to have turned a corner, potentially motivating buyers to enter the marketplace over the next year, especially with prices remaining relatively low for the time being. This shift in momentum could pave the way for a more dynamic and resilient real estate market, benefitting investors, homeowners, and industry stakeholders alike.

To find out about more of some of the most attractive new-build and regeneration projects that Manchester has to offer, click here.

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