Average property prices are set to fall next year, but by how much?
House prices are predicted to fall by between two per cent and four per cent in 2024, according to Halifax.
The UK’s largest lender said that broader economic challenges were likely to continue to put ‘mild downward pressure’ on prices.
Kim Kinnaird, director of Halifax Mortgages, explained: “Mortgage rates are already falling, with a typical five-year fixed 75 per cent LTV deal now below five per cent, having been as high as 5.7 per cent as recently as July. All being equal, these rates are expected to fall further over the coming months.
“However, while pay growth is now above inflation – beginning to ease the cost of living squeeze for some – other factors will continue to weigh on households’ spending power next year.
“Economic growth is expected to remain weak, with unemployment rising and frozen tax thresholds limiting any increase in take home earnings.”
2023 price falls
Halifax said that the average UK house price is now £283,615 compared to £286,328 a year ago, a fall of £2,713, or 0.1 per cent in the year to November.
It added that average property prices are still £44,439 (18.6 per cent) higher than at the start of the pandemic (£239,176 in March 2020). They are also up 59 per cent over the last decade.
Kinnaird added: “This resilience – which owes more to the shortage of available properties for sale than strength of demand among buyers – means average house prices end the year just three per cent down on August 2022’s peak (£293,025) but £44,000 above pre-pandemic levels.”
“To some extent this masks the fluctuations we’ve seen in the housing market throughout 2023. As wider economic headwinds began to bite, house prices fell for six consecutive months between April and September, before rising again later in the year as prospects improved.
“And it’s a mixed picture across the country, with some areas still seeing annual growth, such as Northern Ireland at 2.3 per cent, while in regions like the South East of England house prices fell by 5.7 per cent.”
Halifax said it does expect to see a ‘partial recovery’ in market confidence and transaction volumes in 2024 as interest rates ease and affordability improves.
