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UK Property Market: Expert House Price Predictions for 2024

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    What Will Happen to Property Prices This Year?

    When deciding whether or not to buy a house or invest in property, research is key for making sure you’re making a good decision. This includes research on location, historic price performance, and other aspects, but one of the most important factors to look at is future house price forecasts. This is especially true for buyers interested in buy-to-let investment, where capital price growth speculation is a fundamental part of the strategy to make money from property.

    No-one can predict the future, and property prices are sensitive to unforeseen economic forces, meaning that no expert forecast can be 100% reliable. House price predictions will vary from expert-to-expert, sometimes quite significantly, but by looking at a range of different forecasts from several reliable sources, those thinking of getting into property investment can get some idea of what to expect in 2024 and beyond.

    A recent report from Nationwide noted that the market has been surprisingly resilient in the face of economic challenges such as stretched affordability and high interest rates, giving investors hope that the market can weather economic storms, even those not predicted by property experts.

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      How Are Property Price Predictions Calculated?

      Different sources use different methods to create their house price forecasts for the year ahead, which explains why the predictions can vary so much. Firstly, the current market and recent trends will be taken into consideration. In the absence of a large-scale economic or political event, the trajectory isn’t likely to change course massively month-to-month.

      Historical price growth is another factor that can influence predictions. By looking at the past performance of regional markets and the UK as whole, experts can look at the rate of growth and how it was affected by previous economic and political changes, helping them guess how it may react in the future. These figures can be collected from a number of sources, and mortgage lenders and property platforms will often use their own data.

      Not all economic fluctuations can be predicted before they happen but sometimes a general idea can be gleaned. For example, it was known that there would likely be an election this year before it was officially announced, as it had to be held in January 2025 at the latest, and experts took this into consideration while calculating their forecast. In light of new data, experts will often also update their forecasts to reflect the new information part way through the year.

      Will UK House Prices Fall in 2024?

      Initial forecasts for 2024 that were published at the end of last year were bearish, primarily due to high interest rates. 2023 was characterised as a challenging year, and as interest rates remained high, most expected these tougher conditions to continue and anticipated further modest price dips. However, after a better-than-expected start to the year, many forecasts have been updated with a more positive outlook. Now most forecasters seem to expect house price growth looking at the UK as a whole, but average growth predictions do vary by region and city. Regional forecasts are just as important as the UK average forecast, and will be looked at in more depth later in this article.

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      What are Some Expert Predictions for the 2024 UK Property Market?

      In Savills’ original 2024 predictions that were released in November 2023, their property investment experts forecasted that house prices would decline by -3%. But with a more promising than expected first quarter of the year out of the way and a marked improvement in lead indicators of demand, the projections have been revised to positive growth of 2.5%.

      In regards to this upgrade, Lucian Cook, head of residential research at Savills, said: “The outlook for 2024 has improved since our last (November 2023) forecasts as mortgage costs have nudged down slightly and are much less volatile. The outlook for economic growth has also slightly improved, pointing to relatively modest house price growth this year, with greater potential over the following few years.”

      JLL also recently published an updated forecast, changing their prediction of a price fall of -3% to a more optimistic positive growth of 2% for UK prices in 2024. Knight Frank predicted a similar figure of 3% growth for the UK as a whole this year. Other useful data has been published such as The house price tracker from The Times.

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      Future House Price Predictions for the UK

      Some forecasts give projected figures for beyond 2024, with some even giving forecasts for five years ahead up to 2028.

      For example, the Savills forecast gives predicted UK growth figures for the coming years. They forecast growth of 3.5% in 2025, 4.5% in 2026, 5% in 2027, and 4.5% in 2028, showing they believe increases will be more substantial per year following 2024’s 2.5%. They also state they anticipate cumulative growth of 21.6% in the next five years to 2028.

      According to Knight Frank’s UK house price predictions for the next 5 years, the average UK growth in 2025 will be 3%, in 2026 it will be 4%, in 2027 it will be 5%, and in 2028 it will be 4%. They forecast a cumulative growth of 20.5% in five year’s time.

      JLL’s future forecasts posit an average 3% increase in 2025 for the UK, growth of 3.5% in 2026, 4.5% in 2027, and 3.5% in 2028. Their cumulative prediction for 2024-2028 is growth of 17.6% for the UK as a whole.

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        Regional Forecasts for the UK Property Market in 2024

        When comparing different regions for property price trends, significant differences can be found. In particular, in 2023 and 2024 a clear north-south divide emerged, with the North of England consistently outperforming London and other southern regions.

        So where are the best places for buy-to-let in the UK? Looking at future capital growth predictions can help an investor find the most lucrative locations.

        What Will Happen to London House Prices?

        As the capital city, London’s property market is closely watched, meaning there are many forecasts to go off when researching house price predictions in this area. In the current market, London’s forecasts are not as optimistic as many other UK regions. This is because the city is the most expensive place in the country to buy property, and experts have predicted it is currently undergoing a price correction as it hits an affordability ceiling.

        Savills has stated they expect London property prices to grow by 2% in 2024, which is less than the UK average as a whole. Their cumulative prediction for the years leading up to 2028 is 14.2%, which is the lowest projected growth of all regions.

        Knight Frank has put forward a similar forecast of 2% growth for Greater London in 2024, and 15.9% five-year cumulative growth.

        Other forecasters are more optimistic for the capital. JLL has stated they anticipate 19.8% cumulative growth between 2024 and 2028 for Central London, and 18.7% for Greater London. This is slightly more than their UK average prediction of 17.6%. However, they do still expect 2024 to be a year of slow growth for the city, with 0% growth anticipated for Central London and 1% for Greater London.

        Further Reading: Take a look at our guide to best buy-to-let areas in London to learn more about property investment in the capital or up-to-date London property news.

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        UK Regional House Price Forecasts Outside of London in 2024

        What Will Happen to House Prices in Southern England?

        In 2024, the South West and the South East are predicted to see growth of 1% and 1.5% respectively according to the Savills forecast. The 5-year forecast puts them at 18.7% and 18.2%, which is promising but less than the average predicted for the UK as a whole and much lower than some other forecasts for northern regions.

        What Will Happen to House Prices in Northern England?

        According to Savills, northern regions are in for the highest expected growth, with the North West forecast for 4% growth in 2024, Yorkshire and The Humber is forecast to experience 3.5% growth, and 4.5% for the North East. This is more than the UK average projection of 2.5%, and looking at the 5-year growth the difference is even more pronounced.

        When it comes to 5-year growth leading to 2028, the North West has the highest prediction of any region at 28.8%. This means that North West property prices are predicted to grow twice as fast as London property.

        Yorkshire and the Humber comes in second with 28.2%, and the North East is predicted to see 25.2% growth in the years leading up to 2028.

        Further Reading: If you’re interested in North West property hotspots then find out more about the best areas to buy in Liverpool or property investments Manchester.

        What Will Happen to House Prices in the Midlands?

        Savills forecast that the West Midlands will see price growth of 2% in 2024, and the East Midlands is set for 2.5%.

        Looking at the 5-year forecasts for these regions, the West Midlands is predicted to experience 23.4% growth, and the East Midlands is forecast to see 22.8%. Both forecasts are higher than the overall UK average growth projection of 21.6%, and more promising than London and other southern regions. But the Midlands is not forecast to experience better growth than the North of England or Scotland and Wales.

        What Will Happen to House Prices in Wales and Scotland?

        According to Savills’ forecast, Scotland and Wales are also predicted to be on a healthy growth trajectory. This year, Wales is forecast to see a property price increase of 4.5%, while Scotland is predicted to have 4% growth.

        The 5-year forecast also looks optimistic for these two countries. In the five years leading up to 2028, Wales is set to see 26.4% growth and Scotland is predicted to see 25.8% growth. These are promising figures, outdoing London, the South of England, and the Midlands, but these predictions are not as high as the projected growth for the North West and Yorkshire and the Humber.

        Investors should also keep in mind that stamp duty in Wales and Scotland differs to that of England.

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          Is 2024 a Good Year to Buy Property?

          The main question after looking at all these predictions is ‘is it a good time to invest in property’?

          As 2023 was called a challenging market, some investors may be hoping to catch the market just before recovery in order to get prices at their lowest. However, this can be difficult to predict, and many end up missing the boat. It makes more sense to assess your own personal situation to help you decide if now is the best time for you to invest in property, without rushing into anything or delaying proceedings too much without good reason.

          All investors have different circumstances, but it is worth noting that property prices are expected to rise more substantially in the coming years, meaning they are predicted to be at their lowest in 2024 and forecast to increase over the next five years according to the sources cited in this article.

          To find out more about individual cities when it comes to UK property investment, take a look at our buy-to-let area guides covering topics such as Grimsby investment properties and Hastings investment properties.

           

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          Author

          Jessica Ferris

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          Jessica Ferris is a property writer at RWinvest, helping our readers stay ahead of property market trends with the latest news and statistics.

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