What will prices do in 2024?

The UK housing market has always been a topic of great interest and speculation and the talk of house prices will often fill a conversation over many a dinner table. 

As we look ahead to 2024, it is natural to wonder what lies in store for house prices. While predicting the future with absolute certainty is impossible, we can analyse current trends, economic indicators, and expert opinions to make informed projections. So what factors could influence house prices in the UK and discuss potential scenarios for 2024. 

1. Economic Factors:

The performance of the UK economy plays a significant role in determining house prices. Several key economic factors may impact the housing market in 2024:

a. GDP Growth: A strong and stable economy usually translates into higher house prices. If the UK's economy continues to recover and grow steadily, it is likely to have a positive effect on house prices.

b. Interest Rates: The Bank of England's monetary policy, particularly interest rates, can influence the cost of borrowing for homebuyers. Lower interest rates can stimulate demand and potentially drive up house prices, while higher rates may have the opposite effect. The current base rate has now stayed the same for over 150 days, putting some stability back into peoples minds.

c. Employment Situation: The job market and employment rates are crucial indicators for the housing market. Lower unemployment rates and increased job security can contribute to higher demand for housing, potentially leading to price appreciation.

2. Supply and Demand Dynamics:

The balance between housing supply and demand greatly impacts house prices. Factors that may influence supply and demand in 2024 include:

a. Housing Supply: The rate of new housing construction and availability of housing stock can affect prices. If the supply of housing fails to keep up with demand, prices may rise. Conversely, an oversupply of properties could lead to a slowdown in price growth or even a decline.

b. Population Growth: Changes in population, including migration patterns, can affect housing demand. If the population continues to increase, especially in areas with limited housing supply, it could put upward pressure on prices.

c. Government Policies: Government initiatives and housing policies can also impact the housing market. Arguably, the Stamp Duty holiday used to motivate the market during the pandemic could equally be blamed for slumping the market when it was removed! . Policies aimed at increasing affordability or promoting homeownership may influence price movements in the future.

3. Regional Variations:

The UK housing market is diverse, and regional variations exist in terms of price growth and market conditions. It is essential to consider regional factors when predicting house prices in 2024:

a. London: Historically, London has experienced higher price growth compared to other regions. Factors such as international investment, employment opportunities, and lifestyle amenities contribute to its unique market dynamics.

b. Northern Regions: Cities in the North, such as Manchester and Leeds, have seen significant growth in recent years. Factors like investment in infrastructure, regeneration projects, and lower property prices compared to London make these regions appealing to buyers.

c. Rural Areas: Rural areas often offer a different housing market experience, with factors such as lifestyle choices, proximity to natural amenities, and limited supply influencing prices.

Conclusion:

While it is challenging to predict house prices with certainty, analysing economic factors, supply and demand dynamics, and regional variations can provide insights into potential trends,  and there is a lot to be positive about, so our hopes for 2024 are that we will see a better market than 2023 but with a steady increase in prices rather than any boom and bust scenarios.