UK Property Market Surprises with Positive Outlook for 2024

UK house prices - a positive start to 2024.

In a shift from previous forecasts, the latest Halifax House Price Index has stated that the average house price rose by +1.3% in January, the fourth monthly rise in a row and property prices overall grew by +2.5% annually. A typical UK home now costs £291,029, over £3,700 more than last month, showing positive signs that the UK property market is going against previous projections.

Earlier predictions by Knight Frank, anticipated a 4% decrease in average property values by the end of 2024. However, recent developments have led to an impressive reversal of this outlook, with an expected increase in house prices by 3%, showcasing a 7% swing.

The Catalysts Behind the Change

Several factors have contributed to this optimistic reassessment. A significant drop in inflation rates has been a primary driver, influencing the market's direction. Moreover, the mortgage sector has seen a flurry of activity with lenders engaging in a rate-slashing spree. The five-year swap rate, a crucial determinant in pricing fixed mortgage deals, witnessed a substantial decline in the last quarter of 2023. This change aligns with the expectations of a decrease in the Bank of England base rate, which currently stands at 5.25%.

The impact on mortgage rates has been profound. The average five-year fixed mortgage rate has fallen to 4.64%, a notable decrease from the 6.11% peak in July 2023. This reduction in rates has made it easier for buyers to borrow more for home purchases, thus energising the market.

Expert Opinions and Market Dynamics

Knight Frank predicts a wave of optimistic forecasts from housing experts in the coming weeks as well as improved economic news and the reduction in mortgage rates to have a positive affect on the housing market's dynamics. Additionally, there is speculation about a potential election in the latter half of the year, which could further invigorate the spring housing market.

The market's revival is also evident in property listings and prices. Rightmove has reported a significant rise in average asking prices, the largest seen since 2020. The volume of new properties and completed sales has also seen an uptick, indicating a robust market activity.

Rightmove Reports Significant Rise in House Prices

In January, property asking prices experienced a 1.3% surge, the most significant rise since 2020, as reported by Rightmove, with the average listing price for homes approaching £360,000. The online property platform also observed a heightened level of activity among buyers and sellers, evidenced by a 5% increase in prospective buyers reaching out to estate agents. The influx of properties entering the market for sale was 15% greater compared to the previous year, and the volume of sales agreements was up by 20%.

Regional Variations and Future Expectations

While the general trend is positive, regional differences exist. For example, country houses, which were initially predicted to see a 7% fall in prices, are now expected to experience a smaller 2% decline. This change reflects a market correction post-pandemic highs.

In the capital, homeowners can expect modest value increases of around 2%, with central London's price growth not expected to align with the rest of the UK until 2025. The potential general election in the autumn could impact higher-end properties more significantly, as any change in government might lead to tax reforms.

In the North East and South West, there's been a significant increase in options for the growing number of new buyers. The market isn't flooded with homes for sale; the total number of available properties is merely 1% higher than the typical market levels seen in 2019. Nonetheless, it's crucial for prospective sellers to set competitive prices, despite the surge in buyer interest. This is because the rate at which properties are being listed is exceeding the rise in the number of buyers making enquiries.

Acorn Property Group is forging ahead, crafting premium-quality homes in areas with high demand and low supply. Acorn's clientele largely comprises discerning older individuals seeking to downsize, a demographic that uniquely positions us to navigate and thrive amidst market challenges. This year has kicked off on a high note for Acorn, marked by a surge in sales and a significant uptick in enquiries. With several new site unveilings on the horizon, we at Acorn Property Invest are excited to continue fundraising for developments that people love to live in. 

Investing In Property in 2024

In summary, the UK property market in 2024 is shaping up to defy negative expectations, offering opportunities to buyers, sellers and hands-off property investors. With the market showing growth and currently this presents a great time for investors looking to enter the property market from an alternative angle with options. To find out more about Acorn Property Invest’s property development investment opportunities, register here. 

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Investment opportunities available via Acorn Property Invest are exclusively targeted at exempt investors who are experienced, knowledgeable and sophisticated enough to sufficiently understand the risks involved, and who are able to make their own decisions about the suitability of those investment opportunities. All investors should seek independent professional investment and tax advice before deciding to invest. Any historic performance of investment opportunities is NOT a guide or guarantee of future performance and any projections of future performance are not guaranteed. All investment opportunities available via Acorn Property Invest are NOT regulated by the Financial Conduct Authority (FCA) and you will NOT have access to the Financial Services Compensation Scheme (FSCS) and may not have access to the Financial Ombudsman Service (FOS).