Zoopla’s House Price Index forecast edition reveals its housing market predictions for next year. So what will 2024 have in store?
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House prices expected to fall 2% over 2024
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Rising incomes expected to steadily improve housing affordability
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Mortgage rates expected to fall back to 4.5% by the end of 2024
What’s going to happen to house prices in 2024?
UK house prices are expected to fall 2% over 2024. Homes are currently looking expensive by historic standards amid rising mortgage rates over the last 18 months. If house prices fall further and incomes increase, or mortgage rates fall back, affordability will improve for home buyers and this in turn will support sales.
The number of homes for sale has now reached a 5-year high, meaning sellers will need to keep pricing competitively if they’re serious about selling. This will keep pricing under pressure.
In 2023, the south of England bore the brunt of house price falls but those falls are now spreading further afield. Today, 4 in 5 housing markets are registering annual price falls, up from less than 1 in 20 just six months ago.
But crucially, the scale of price falls is modest and limited to very low single digits. No markets are currently registering annual price falls of more than 5%. However in 2024, we expect to see an increase in markets registering 5% falls, as sellers continue to adjust their asking prices in the face of weaker buying power.
Despite this, the risk of a major collapse in prices is becoming less of a concern, and an improvement in sales hinges more on buyers’ financial ability to move when mortgage rates are in the 4-5% range.
And while the likelihood of a double-digit price drop remains low, housing affordability needs to improve to bring more buyers back into the market and to support sales volumes.
