What’s In Store For The Housing and Mortgage Markets This Year

Falling house prices and turbulent mortgage rates made 2023 an unpredictable year for homeowners and movers. As the bells ring out for the start of 2024, is a calmer year on the cards?

Three key questions dominate analysts’ minds it seems. 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 not bottomed out yet

After recording significant drops in 2023, even the more optimistic analysts expect house prices to keep falling in 2024. According to one such prediction¹, prices will slip a further 2% across the year. Others² expect a more radical drop of as much as 10% by Autumn 2024.

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 analysis³ suggests.

Mortgage rates to fall?

Mortgage rates 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 be the biggest group of buyers in 2024. There are positive signs, however, that mortgage rates are falling and will continue to do so.

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.”He continued, “Assuming mortgage rates remain in the 4 to 5% range, we see UK house price growth remaining in the low single digits for the next 1 to 2 years, below the projections for growth in household incomes.”

 Here for you

Whether or not these expectations come to pass, we’ll be here to guide you through all your property decisions in 2024.

¹Zoopla, 2023

²finder.com, 2023

³JLL, 2023

⁴Zoopla, 2023

⁵Octane Capital, 2023

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments