In a turn of events, UK house prices are now expected to rise in 2024. The latest five year forecast from Savills is now predicting a 2.5% average increase in UK house prices this calendar year. This is a stark contrast from the previous forecasts in November 2023, where average UK property price was predicted to decrease by 3%. By 2028, UK properties are predicted to increase by 21.6% in comparison to current prices.
The number of UK properties sold has also been revised in the latest five year forecast. It is now predicted that 1.02 million homes will change hands, where this figure was previously predicted to be 1.01 million in November’s forecast.
Reasons for Positive Outlook
UK house prices have been previously impacted due to lack of affordability. The cost of living crisis in combination with rising mortgage rates made it considerably more difficult for buyers. Although the base rate remains at 5.25%, competition among mortgage lenders has led to the cost of borrowing to decrease, prompting more activity in the market. Now that the number of transactions has increased, the expectation is that this will contribute to an increase in house prices. It’s important to note that this is an average of house prices UK wide, and performances in individual locations around the UK may differ.
Comments from Savills Head of Residential Research
Lucian Cook, head of residential research at Savills said the following based on the recent forecast:
“The outlook for 2024 has improved since our last (November 2023) forecasts as mortgage costs have nudged down slightly and are much less volatile.
“The outlook for economic growth has also slightly improved, pointing to relatively modest house price growth this year, with greater potential over the following few years.
“In November, a 75% LTV mortgage from Nationwide on a 2-year fix cost 5.34%, and mortgage approvals were down below 50,000 per month. The higher cost of debt dampened demand and put downward pressure on prices.
“However, the highly competitive nature of the mortgage market has meant that lenders have fairly aggressively priced in the prospect of cuts in bank base rate, causing buyer confidence, and prices, to recover somewhat.”
Selling Your Property in 2024?
Are you considering selling your property following the news that housing prices are set to increase? If so, it is important that you ensure your property is in the best condition possible in order to maximise potential offers.
Some common property issues include issues such as structural defects, damp or rot issues, broken appliances and decorative issues.
If your property requires remedial damp proofing, or treatments for wood rot or woodworm, visit the Rentokil Property Care website for more information on professional damp surveys and solutions.
References
https://www.buyassociationgroup.com/en-gb/news/invest-in-property-predict/
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