The UK property market has faced its share of turbulence over the past 18 months, rocked by rising mortgage rates and a significant decrease in home transactions. However, as we step into 2024, experts are signalling that it might just be the perfect time to buy a house. Here’s why the tide is turning and what potential homebuyers need to know.
Market Recovery Faster Than Expected
After a year and a half of unpredictability, the UK property market is showing signs of a robust recovery. Driven by lower mortgage rates, a stabilising economy, and renewed consumer confidence in personal finances, the market dynamics have shifted. Property analysts, real estate agents, and economists are all noting that this is increasingly becoming a buyer’s market. Early 2024 has seen a resurgence in activity, sales, and even prices, surpassing many experts’ expectations.
The Current State of House Prices
Despite the challenges, the decline in house prices was less severe than many feared. According to data from Nationwide, house prices fell by 1.8% throughout 2023 and saw a cumulative drop of 6% from the market peak in August 2022 to December 2023. This downturn was modest compared to the dire predictions of a 30% decrease. More encouraging still, the first quarter of 2024 marked a turnaround, with an average increase in house prices by 1.4%.
Lucian Cook from Savills observed an earlier-than-anticipated recovery in the market, supported by decreasing inflation and greater stability in mortgage markets since late last year. Analysts now believe that the market bottomed out in the final quarter of 2023, with prices expected to either stabilise or rise slightly by year-end.
Positive Outlook for 2024
Optimism is particularly high among some experts, like Anthony Codling of RBC Capital Markets, who predicts a 5% rise in UK house prices for 2024. This forecast is underpinned by increasing mortgage approvals, rising wages, and the expectation that mortgage rates are more likely to decrease than increase. Codling emphasises the positive outlook, suggesting that the “housing market’s glass is half full.”
London’s Market: A Special Focus
London has seen relatively weak price growth since 2016, with only a 13% increase. Yet, the start of 2024 has painted a different picture for the capital. For the first time since 2016, homes in London are selling above their asking price more frequently than in any other region of England and Wales. Nehal Virani from Property Hub describes it now as a “buyer’s market,” marking a significant shift.
Estate agents in London are increasingly confident about the market’s prospects. Jeremy Leaf, a North London agent, notes a significant increase in listings which has provided more choices to buyers. He points out that there’s a notably stronger demand for family houses over flats, reflecting a broader trend in housing preferences.
Is It Time to Buy?
For those considering purchasing a home, the current climate in the UK property market provides a compelling case. With prices stabilising, an increase in property listings, and favorable mortgage conditions, now could indeed be an ideal time to invest in a property. Whether you’re looking in bustling London or elsewhere in the UK, the market conditions are more favorable than they have been in recent memory. If you’ve been waiting for the right moment to buy a house, 2024 might just be your year.