What to expect for housing in 2024

As 2024 begins in earnest, what can homeowners, sellers and prospective buyers expect in the new year? Falling house prices and uncertainty around mortgage rates made for a turbulent 2023. Will a new normal take shape in 2024? Or will changeability remain the only constant?

Three key questions are on the tip of analysts’ tongues. First, do house prices have further to fall? Second, will mortgage rates go lower? And third, how will affordability change throughout the year?

House prices

After recording substantial drops in 2023, even the more optimistic analysts expect house prices to fall further in 2024. According to one such prediction¹, prices will slip another 2% across the year.

Pessimistic analysts, however, foresee a drop of a much as 10%² by Autumn. This would be a blow to homeowners and sellers but might be welcomed by many first-time buyers (FTBs) trying to a get a foot on the property ladder. After a decade of soaring house prices, this respite might allow some to secure their first home.

As the number of homes for sale has steadily risen, sellers are facing pressures to keep pricing competitively, further reinforcing the picture of a buyers’ market. Despite robust supply, property prices may bottom out in 2024, separate analysis³suggests.

Mortgage rates let cash buyers dominate

Since the ‘mini budget’ of September 2022, rising mortgage rates have become a mainstay of UK news cycles. Mortgage rates now look set to remain higher for longer into 2024, some analysts⁴ predict, with an expectation that they will not fall back to 4.5% until the second half of 2024.

In this context of higher rates, it is expected that cash buyers will form the largest group in 2024. Some homeowners needing to remortgage in 2024 may also be stung with rates far higher than they had been paying.

Steady increase in housing affordability?

After a shaky year, mortgage affordability improved towards the end of 2023. Indeed, the average monthly repayment for those purchasing in September was £64 per month lower than in July⁵.

Expected rising incomes in 2024 may have a positive effect on housing affordability. Richard Donnell of Zoopla commented, “The housing market is adjusting to higher borrowing costs through lower sales rather than a big decline in house prices. Assuming mortgage rates remain in the 4-5% range, we see UK house price growth remaining in the low single digits for the next 1-2 years.”

Here to help

Whatever is in store for the housing and mortgage markets in 2024, we’ll be here to guide you through all your property decisions.

Your home may be repossessed if you do not keep up repayments on your mortgage.

You may have to pay and early repayment charge to your existing lender if you remortgage.

¹Zoopla, ²finder.com, ³JLL, ⁴Zoopla, ⁵Octane Capital