A detailed analysis conducted by the mortgage specialists at the comparison website Confused.com suggests an average decline in house prices by more than £50,000 by the close of 2024. This potential price drop in the housing market is not something to be overlooked if you’re considering an investment in property. It’s a significant drop in value that is poised to impact both the buying and selling segments of the real estate market.
Presently, the average house price in the UK rests at £246,575. If Confused.com’s market data assessment holds water, we could see that number tumble, averaging £201,495 by this time next year, and further diminishing to an estimated £195,652 by the end of 2024.
Property Investment Path: The Initial Deposit Challenge
Venturing into the realm of property purchasing, one of the most gruelling challenges for many prospective buyers is accumulating the initial deposit. It often serves as a litmus test for the feasibility of one’s ambition of property ownership. Right now, in the UK, the average 10% deposit required to acquire a house accounts to £24,658.
Yet, here lies another silver lining in the predicted price drop. Should the average house price decrease as anticipated, the average deposit is also set to shrink. By the 3rd quarter of 2024, a drop of over £4K on the initial deposit is anticipated, and towards the end of the year, this figure should contract even further to £19,565.
Geographic Variations in Housing Prices
The UK housing market, much like any other, isn’t homogenous; it is nuanced with its regional disparities. The area in the UK with the currently lowest deposit required for a property is the North East, with first-time buyers needing to save £30,198.
Some other significant findings from the study include areas such as Kensington and Chelsea in London, which recorded the highest first-time buyer (FTB) house price at an exorbitant £1.2 million in 2023. Thanet in Kent, on the other hand, has witnessed the largest year-on-year surge in FTB buyer prices since 2013, increasing by 8.3%. Elmbridge in Surrey logged the greatest chasm between FTB property prices and overall house prices, spiking at 43.9%.
Differing Opinions on the Property Market Outlook
Even though experts agree on a decrease in property prices, not all forecasts align when it comes to the degree and timeline of this fall. Earlier this week, global property consultancy Knight Frank delivered a darker forecast for house prices this year, predicting they are set to fall by 7% and would plunge further by 4% in 2024. They had previously stated a 5% drop in 2023, with a similar reduction in the following year.