Not everyone is forecasting further falls in house prices next year. In the Daily Express, their finance expert has a different view, summarised below.

Despite some dips in house prices this year, it’s essential to put these changes into perspective. According to the latest figures from Halifax, there was a modest decrease of 3.2 percent in house prices over the year to October. However, this decline doesn’t indicate a market crash. In the context of the stock market, a 10 percent drop is typically seen as a correction, while a 20 percent fall is considered a crash. The current situation in the housing market is far from these thresholds, as evidenced by the fact that house prices actually increased by 1.1 percent in October.

Forecasting Future Trends

The expectation of rising house prices in 2024 is based on data from GoCompare.com. This projection hinges on the stabilization and peak of interest rates. Mortgage rates are a critical factor in this equation. As long as borrowing costs remain manageable, homeowners won’t be pressured to sell, and new buyers will continue to find entering the market attainable.

Another positive sign is the increase in wages, which have risen by 8.5 percent over the last year. This boost in earnings enhances the purchasing power of potential buyers, contributing to a healthier property market.

Projected Growth in House Prices

If mortgage rates maintain their current average of 5.3 percent, GoCompare anticipates a rise of approximately 5.92 percent in house prices by September 2024. This increase would elevate the average property price from £291,385 to about £308,635, translating into a gain of £17,250. This potential growth would not only benefit homeowners by increasing their net worth but also signify a robust and thriving housing market.

The Role of Mortgage Rates

An interesting trend to note is the ongoing reduction in mortgage rates. This trend stems from the expectation that the Bank of England will hold the base rate at its current level of 5.25 percent and possibly reduce it next year. This anticipation is leading lenders to lower mortgage rates, which in turn supports the projection of rising house prices.

In summary, while the past year has seen some fluctuations in the UK housing market, the outlook for 2024 is positive, with an expected increase in house prices. This is particularly relevant for those considering property investments, as it suggests a period of stability and growth in the market.