Average house prices in the UK will fall by 1% next year as competition increases among sellers, Britain’s biggest property website has forecast.
Sellers were likely to have to price more competitively to secure a buyer in 2024, while mortgage rates would settle down though “remain elevated”, said Rightmove.
A year ago, Rightmove predicted that average asking prices would fall by 2% in 2023. On Monday, the company said the average was 1.3% lower than in 2022 as the property market continued to contend with significantly higher mortgage costs and a cost of living crisis that refused to go away.
The website records asking prices rather than the actual one properties are sold for. It said it was predicting that these would typically be 1% lower nationally by the end of 2024. The market was continuing its transition to “more normal levels” of activity after the busy post-pandemic period, it added.
Rightmove said the number of sellers who had had to cut their asking price during 2023 had risen to 39%, compared with 29% last year and 34% in 2019.
Tim Bannister, a property expert at Righmove, said: “An average drop of 1% in prices reflects our prediction that it’s likely to be another muted, and in parts challenging, year for some buyers and sellers in 2024.” But he added: “The better-than-anticipated activity this year has shown that many buyers are still getting on with satisfying their housing needs, and there is considerable opportunity for sellers and their agents to attract these buyers with the right pricing.”
On Friday, Nationwide building society surprised some observers when it announced that prices were up 0.2% month on month in November, after a 0.9% increase in October and a 0.1% rise in September. However, it said that on a year-on-year basis, prices were down 2% in November.
Last week, the property website Zoopla said market conditions were the best for buyers since 2018, when Brexit uncertainty hung over the market.
There was better news for people having to remortgage next year. The mortgage broker John Charcol predicted on Friday that the rates on some new fixed-mortgage deals could dip below 4% by mid-2024.
Rightmove said average mortgage rates had now fallen steadily since July, “providing movers with much more stability and certainty over the type and cost of mortgage offer they are likely to receive”.
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But while the outlook for mortgage rates had improved, with many commentators believing interest rates may have peaked, the property website said: “Affordability remains stretched for many buyers.”
As the Bank of England signals that any cuts to its base rate are not imminent and that borrowing costs are likely to remain elevated during 2024, “some buyers’ spending power will remain limited”. said Rightmove.
