How the Current Real-Estate Market is Anticipated to Perform in 2024
The Real-Estate Market Statistics: A Recap
The property market has been a topic of great interest lately, especially with the release of the latest official figures. According to the Office for National Statistics, the average property price fell by 1.4% in the 12 months leading up to December 2023. This is in contrast to the 2.3% annual fall recorded in November, indicating a potential shift in the market.
Signs of Recovery: What to Expect in 2024
Despite the recent dip in property prices, there are strong indications that the market is poised for a rebound in 2024. Official figures suggest that the slowdown caused by rising mortgage costs in 2023 may be coming to an end, with the downward trend in house prices bottoming out. Furthermore, the Bank of England is expected to cut interest rates from 5.25% to 4.5%, prompting lenders to offer more attractive mortgage deals. These developments are expected to stimulate demand and drive prices up.
Regional Variations: A Closer Look at the Numbers
While the national average provides a broad overview, it’s essential to consider regional variations in house prices. In England, for example, the average house price fell by 2.1% to £302,000, marking the biggest decline among the UK nations. Conversely, Scotland witnessed a 3.3% rise in average house prices, closing the price gap across the UK. When analyzing these regional variations, it’s crucial to understand the underlying factors that contribute to these fluctuations.
Rental Market Trends: A Parallel Perspective
While house prices experienced a decline in 2023, the private rental market continued to thrive. Rental costs have been on an upward trajectory since the onset of the pandemic, with inflation averaging 6% during the last four months of 2023. The Office for National Statistics reported a 6.2% increase in private rental prices paid by tenants in the 12 months leading up to January 2024. This indicates a shift in demand dynamics, with implications for both landlords and tenants.
Unique Insights: What Sets 2024 Apart
2024 is poised to be a transformative year for the real-estate market, with several distinctive factors at play. The anticipated recovery, driven by falling mortgage rates and improving real incomes, sets this year apart from its predecessors. The potential influx of cash buyers and first-time buyers, taking advantage of cheaper mortgages, may further reshape the landscape of the property market. These factors are likely to influence not just prices, but also the overall housing market dynamics.
In Summary
In summary, the real-estate market in the UK is showing signs of recovery following a period of decline in 2023. The anticipated recovery in 2024 presents a unique landscape, characterized by shifting demand patterns, changing mortgage rates, and regional variations in property prices. Moreover, the thriving rental market adds another layer of complexity to the overall housing market dynamics. As we navigate through these changing tides, it’s crucial to stay informed and proactive in understanding the evolving trends and opportunities within the real-estate sector.
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Average property price fell 1.4% in 12 months to December, ONS says
The property market is expected to recover in 2024 after average UK house prices fell just £4,000 last year, according to official figures.
The average house price fell 1.4% in the 12 months to December 2023, an improvement on a 2.3% annual fall recorded in November, the Office for National Statistics saying.
The figures suggest that the housing sector slowdown in 2023 caused by rising mortgage costs may be over and that the downward trend in house prices has bottomed out.
After gains of more than 20% since 2020 that added more than £60,000 to the average UK house price, the latest figures show an annual fall of £4,000 to £285,000 in December. Prices peaked at £291,100 in autumn 2022.
Pent-up demand from cash buyers and first-time buyers who can access much cheaper mortgages in 2023 is expected to increase. drive prices up to their maximum this yearaccording to many economists.
The Bank of England is expected to cut interest rates this year from 5.25% to 4.5%, prompting lenders to cut their latest two- and five-year fixed-rate mortgage offers.
Halifax figures and On a national scale have shown that prices have recovered since the beginning of the year as mortgage borrowing costs fall.
Gabriella Dickens, British economist at Pantheon Macroeconomics, said: “We expect the official move to follow Nationwide's move and start to recover, as falling mortgage rates and the recovery in real incomes boost affordability.”
England had the highest average prices of all UK nations and saw the biggest fall last year, down 2.1% to £302,000. Property Values in Wales fell 2.5%.
Scotland had the lowest average price and a price rise of 3.3% to £190,000, closing the price gap across the UK.
North West England had the highest annual percentage change in 2023 (up 1.2%), while the lowest was in London, -4.8%.
While house prices fell in 2023, private rentals continued to rise. In the two years leading up to March 2020, when the coronavirus pandemic forced the government to lock down the economy, rent inflation averaged 1.5%. Since then, rental costs have increased year on year before stabilizing at 6% during the last four months of 2023.
“Private rental prices paid by tenants in the UK increased by 6.2% in the 12 months to January 2024, unchanged for the second month in a row,” the ONS said.
“Within England, London had the highest annual percentage change in private rental prices in the 12 months to January 2024, at 6.9%, while the North East experienced the lowest, at 4.7% “.
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