The first house price forecasts for 2024 are appearing despite the threat of recession, inflation (CPIH) still over 6% and interest rates held by Bank of England at 5.25%. 5 Year fixed-rate mortgage are available at 4.8% but many are higher.
First out of the trap are my old friends at Savills. Lucian Cook says that prices will bottom in 2024 and then start to rise. He thinks that the average UK house price is projected to fall by 3% in 2024, after a 4% drop this year. There is lots in the detail of this updated four year forecast, as always but Lucian and his team aren’t expecting prices to plummet!
Over in The Telegraph Phil Spencer is dismissing fears of a house price crash. He’s more concerned about property ownership becoming unfashionable. He says “unless we enter a recession that leads to significant unemployment I don’t think we will see prices falling dramatically, or by more than 10%”.
The Office for Budget Responsibility updated their expectation in The Autumn Statement. The Evening Standard reported their predicted 5% fall. I suggested “Most of the people who think you can predict house prices would be better off doing your horoscope,”.
Oxford Economics expect house prices to fall by just under 9% from peak-to-trough
Rightmove predicts that average new seller asking prices will be 1% lower nationally by the end of 2024, as the market continues its transition to more normal levels of activity following the frenetic post-pandemic period. The level of price reductions has increased during 2023, with 39% of properties now seeing a price reduction during marketing compared to 29% last year, and 34% in 2019.
Pop back and see who else has been brave enough to have a go at predicting prices in 2024.
My own view (for what it’s worth) is turnover (sales) up slightly at around a million and average prices, as recorded by the ONS, down by 3% by Christmas next year.