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How will the cost of homes change in 2024?

This year’s housing market has performed better than many had anticipated, with asking prices declining less than anticipated and strong buyer demand for reasonably priced properties. However, many people who were planned to move now find it more expensive due to rising mortgage and interest rates.

The average asking price for a new seller was predicted by us a year ago to decrease by 2% in 2023; as of right now, prices have decreased by 1.1% year over year. In Great Britain, the average asking price for a house is currently slightly more than £370,000.

In 2024, will asking prices decline?

Following the chaotic post-pandemic period, the housing market is still gradually returning to more typical levels of activity. As sellers compete more to find a buyer, we forecast that by the end of 2024, the average asking price for new sellers would be 1% lower nationwide.

Thousands of local markets, each with a distinct supply and demand dynamic, make up the housing market. Certain parts of Britain will feel the effects of the anticipated decline in new seller asking prices more strongly than others. We might observe new seller asking prices staying the same or even slightly rising in places where there are fewer properties for sale than there were this year.

    What is the current state of mortgage rates?

    In contrast to the more unstable mortgage market at this time last year, average mortgage rates have now been falling gradually since July, giving home-movers much more security and confidence about the kind and cost of mortgage offer they are likely to receive. Currently, the average fixed rate for two years is 5.48%, and the average rate for five years is 5.07%. The current mortgage rates in the UK are available here.

    The mortgage market is more calmer even though mortgage rates are still high in comparison to recent record low levels. Since they can better prepare for what they can afford, buyers who had to put off their plans to move into a new house earlier in the year may feel that the beginning of this year is the ideal moment to go back.

    Even if there are indications that the Bank of England Base Rate has peaked and the outlook for mortgage rates has improved, many homebuyers are still struggling with affordability. The Bank has stated that base rate reductions are not expected anytime soon, and that high interest rates will probably persist through 2024, which will probably continue to reduce the purchasing power of certain house buyers.