What will happen to house prices in 2024?
This housing market this year has been better than many predicted, with lower-than-expected falls in asking prices, and good levels of demand from home-buyers for the right-priced homes. However, rising mortgage and interest rates have stretched the affordability of many people planning to move.
Our forecast a year ago was that average new seller asking prices would drop by 2% in 2023, and prices are currently 1.1% lower year-on-year. The average asking price of a home in Great Britain is now just above £355,000.
Will asking prices fall in 2024?
The housing market is continuing to return to more normal levels of activity following the frenetic post-pandemic period. Next year, we predict that average new seller asking prices will be 1% lower nationally by the end of 2024, as competition increases among sellers to find a buyer.
Our 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.”
Our forecast is based on its whole of market data and house price predictive model using millions of supply, demand and pricing data, along with insights from estate agents and a panel of Rightmove experts.
The housing market is made up of thousands of local markets, each with their own unique dynamic of supply and demand. The predicted fall in new seller asking prices will be felt more keenly in some areas of Great Britain than others. In areas with fewer homes for sale, we may see new seller asking prices remain flat, or even very slightly increase compared to this year.
“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, we are likely to see even more competitive pricing,” says Tim.
If you’re selling a home in 2024, pricing will be key
The level of sales being agreed is 10% lower than at this time in the more normal market of 2019. This year, we’ve also seen 39% of properties with an asking price reduction during marketing, compared to 29% last year, and 34% in 2019.
The average time for a seller to find a buyer has jumped from 45 days this time last year, to 66 days now. Home-sellers who have been competitive on price have been able to find a buyer more quickly. You can check how much homes have sold for in your area here.
Tim says: “New sellers will need to compete with their cut-price neighbours, and work with their estate agent to start with a competitive price, rather than starting too high and needing to reduce later. Our research shows that pricing right at the outset maximises the initial impact among local buyers and gives new sellers a much greater likelihood of a successful sale.”
If you’re considering a move in 2024 and want to know the current estimated value of your home, you can use our instant valuation tool to get an online estimate of what your current home may be worth so you can get an early indication of what your budget might be when you’re looking to buy.
You‘ll be able to see if your home’s value has changed, and how much properties nearby have recently sold for. And every month, the estimate is refreshed, which you can see by setting up alerts or viewing your tracked properties within your MyRightmove account.
You can then get a full expert valuation of your home from an estate agent when the time comes to sell.
2. Arrange a property valuation
When you decide you’re ready to put your home on the market, you can arrange a free, no-obligation expert valuation with a local estate agent here.
What’s happening with mortgage rates?
Average mortgage rates have now fallen steadily since July, providing home-movers with much more stability and certainty over the type and cost of mortgage offer they are likely to receive, compared with the more volatile mortgage market of this time a year ago. The average two-year fixed rate is now 5.48%, while the average five-year rate is 5.07%. You can check the current UK mortgage rates here.
Though mortgage rates are still high compared to recent historically low levels, the mortgage market is much calmer. Those buyers who had to pause their home-moving plans during the last year may decide the start of this year is the right time to return, now that they can better plan for what they can afford.
However, while the outlook for mortgage rates has improved and there are signs that the Bank of England Base Rate has peaked, affordability remains stretched for many home-buyers. The Bank has indicated that Base Rate cuts are not imminent, and interest rates are likely to remain elevated during 2024, which is likely to continue limiting some home-buyers’ spending power.
More choice for home-buyers in 2024
Buyers are much more likely to see a choice of homes for sale in their area that suits their needs compared to the stock-starved pandemic years. Buyers coming to market in 2024 are in a strong position to negotiate on price and take more time to choose the home that’s right for them.
However, the number of available homes for sale has only just increased to pre-pandemic levels and there are no signs of a wave of new listings which would create a glut of homes for sale. With more choice and fewer buyers, sellers who are willing and able to price competitively will attract buyer’s attention.
If you’re thinking about moving in 2024, a good way to find out how much you could borrow is to use a mortgage calculator. And to get a personalised result by applying for a Mortgage in Principle which will take you one step closer to a mortgage offer.
You can also take a look at the different types of mortgages and how to choose a mortgage term that meets your needs, both now and in the future.
READ MORE: Check the current UK mortgage rates
The header image of this article is provided courtesy of Kendrick Property Services, Brighton
