Analysts at Capital Economics predict house prices will fall by 5-6% by mid-2024, because "we think that mortgage rates will stay around their current high level until next summer".
Despite the property market beginning to show signs of recovery it still may be worth holding off before selling your house. Sales are expected to fall by 4pc this year, according to estate agency Savills, before rebounding in 2024 and remaining broadly flat until 2027.
“UK house prices ended 2023 down 1.8% compared with December 2022, leaving them almost 4.5% below the all-time high recorded in late summer 2022. Prices were flat compared with November, after taking account of seasonal effects.
What will happen to UK house prices in the next 5 years?
Over the next five years, UK house prices are on track to rise by 17.9 per cent, or £45,521, Savills suggests. By 2028, the average UK property price is expected to reach £300,108, according to its data. By this point, mortgage rates are likely to be around the 3 per cent mark.
By 2030 the forecast is that some 25% of London's housing stock will be priced at a £1Million or more, with about 7% of the stock in the South East at that same level.
What will happen to house prices in 2024? | The Business | ABC News
Will house prices rise in next 5 years?
London house prices will be down 10 per cent since their peak by the first half of 2024 before finally bottoming out, Savills has predicted in its latest five-year forecast. This will equate to another four per cent price drop next year, as mortgage pressure will continue to hamper would-be buyers.
In 2025, Lloyds expect house prices to rise by 2.3%, while fellow lender Santander has predicted a rise of just 2%. While small, these rises indicate welcome early signs of recovery for the beleaguered housing market.
It predicts that by 2025, average house prices will rise by 5% to 251,476, increasing to 279,641 in 2030 and to 392,301 by 2050 ' a total increase of 64% if this continues at the same rate.
House prices had continued to grow since Covid restrictions ended, with unemployment remaining low and demand for properties outweighing supply. But 2023 marked a change. Experts generally expect house prices to keep falling in 2024.
Latest forecasts show that the average price of a home in the UK will be £335,971 in 2040 and £392,301 by 2050, an increase of 64 per cent on the current figure.
The Office for Budget Responsibility predicts prices to fall by 9% between the end of 2022 and 2024, providing confidence for buyers looking to invest in 2023. This time of year is especially beneficial for those looking to snag a cheap property due to the limited demand for houses during the winter months.
If inflation continues to fall as it did throughout 2023, industry insiders are optimistic that average mortgage rates could fall below 5% again in 2024.
According to agents, this is the number one reason people are struggling to sell their homes. House prices have soared since the pandemic, with annual growth reaching up to 15 per cent at some points in 2021 and 2022.
“Our data shows we are still locked in a buyers market, so it's unlikely that we will see prices rise in 2024 at a national level. But at the same time, they haven't fallen much over the last 12 months, despite mortgage rates more than trebling since 2021," he says.
The UK economy towards the end of 2023 is struggling, with the cost of living and high mortgage rates causing the housing market to slow down and house prices to start falling. It's been predicted by Zoopla that house prices are expected to fall by 2% in 2024, with mortgage rates also expected to fall.
Since 1999, April has been the best month to sell a house in the U.S. Although June has historically been the month with the highest sales price, April is the month when most of these home sellers put their homes on the market. This is based on data that SoldNest has analyzed from the National Association of Realtors.
It was estimated that house prices would drop by 5% in 2023, and are expected to drop further in 2024. At the moment, the most recent data shows that house price growth is slowing down - in October 2023, house prices were -1.1% lower than a year ago, with the average UK house now costing £291,000.
In summary: buying requires a bigger upfront cost, but renting is more expensive in the long term. A good rule of thumb is that buying a property becomes better value after around 10 years, compared to renting an identical property. Whether it's cheaper to buy or rent depends on several factors.
If you're in any way unsure, staying put - even if it's just for now - is likely to be the right decision. Conversely, however, if you are absolutely certain that you want out, moving home is your only real option.
The problem is naive investors believe this myth and buy any old property and think its value will double in a decade – I guess that's why so many investors fail. But as with any good myth, there is always partial truth. So the truth is… some properties do double in value every 7 to 10 years, but many don't!
By 2030, the average house price in England could reach £457,433. In Wales it might be £307,712, in Scotland the figure could be £297,222 and in London it may well be over £1 million. These forward looking house price estimates are based on an assumption that the average cost of a home will increase by 84%.
This isn't a surprise – property is not consistent but cyclical. There are going to be times when prices go up much faster than others, and there are going to be times when prices go down, so no, property prices don't always double every actual 10-year period.
A more challenging macro backdrop is anticipated for equity markets in 2024. Lackluster earnings growth and geopolitical risks are set to weigh on the outlook for stocks. J.P. Morgan analysts estimate S&P 500 earnings growth of 2–3% and a price target of 4,200, with a downside bias.
London house price growth is expected to outperform all other regions of the UK for the first time since 2015, with five per cent annual growth in Q4 2025 and 11.6 per cent growth over the four years to 2026, according to new research from Hamptons.
At a 9% growth rate, the average £1.5m flat will fetch £6.3m by 2030 and £36m by 2050. In the shorter term, LCP, which has invested about £600m in London property, reckons speculators will earn even more – about 14% a year – over the next five years.
