The overall mood coming from the key commentators is that things have stabilised. Though mortgage rates are improving, they are really just “less bad” than they were, but that said, sentiment has changed significantly. After a period of relative calm in so far as interest rates are concerned would-be-buyers are starting to emerge from their bunker and get out on the hunt once more. Matching this is a relatively buoyant New Year bounce.
Rightmove reports the increase in asking prices from December to January was nearly double the 20-year average, and 15% more new listings hit their site at the start of this year compared to 2023. Whilst things look positive however, there are no expectations for a sudden surge in property prices, indeed the view is rather that 2024 will turn out to be a relatively “normal” year. I’ll leave you to judge if that’s a “new normal” or “old normal” for yourselves…
My predictions for 2024 are that it’ll be a tale of two halves, with the first half of the year seeing a good volume of sales being agreed. Then, as uncertainty over the election enters the public consciousness and overseas events (notably the Suez Canal) start to impact inflation rates in the UK, things will likely slow down in H2.
Here’s what the professionals think…
- January 2024 sees a significant deviation from the typical trend, with a +1.3% increase in asking prices compared to December, the largest December-to-January spike since 2020.
- Despite a slight dip (-0.7%) compared to the same period in 2023, vendors’ expectations are adjusting.
- A noteworthy drop in the average 5-year fixed-rate from 6.11% to 4.86% in six months offers a positive outlook for the market in 2024.
- Average house prices stand at £259,157, with a weak overall market activity in 2023, particularly in mortgage-dependent transactions, down by approximately 20%.
- Affordability concerns persist, with mortgage rates squeezing borrowers, impacting the commitment of an average UK salary to mortgage payments.
- Nationwide expects housing market stability in 2024, with sentiments of neither a rebound nor a significant drop. The outlook remains cautious, with potential for improvement if the economic environment surrounding the property market picks up.
- Halifax presents a more optimistic picture, reporting a +1.1% month-on-month price growth in November versus December and an overall growth rate of +1.7% in 2023.
- Regional differences are highlighted, with the south-east experiencing declines (-4.5%) and Northern Ireland seeing growth of +4.5%.
- The outlook for 2024 is cautious, forecasting potential declines of (-2%) to -(4%) due to “economic uncertainty” in the wider economy.
- RICS anticipates a flat market in 2024 compared to 2023, with declines expected to ease.
- Mortgage rate easing is identified as a significant factor slowing previous declines.
- Buyer demand shows improvement, scoring a neutral -3% in December, the first time since April 2022.
- Completion timelines are more efficient, with the average house sale taking 18 weeks, down from 20 weeks in September 2023.
