Declining Property Prices Forecast to Carry on into 2024
According to Halifax’s latest House Price Index, the recent decline in house prices is set to continue into the new year.
A survey for September reveals that the average house price is currently £278,601, which constitutes a monthly change of -0.4% and an annual change of -4.7%.
The monthly change is the sixth consecutive monthly fall, but the decline has slowed down compared to the monthly change from August of -1.8%.
Read on to see how this will affect UK House Prices in 2023 and beyond.
Will House Prices Continue to Fall in 2024?
According to Halifax Mortgages, a mix of factors will continue to exert downward pressure on house prices until next year. The lender states that high interest and mortgage rates affect the market, and interest rates staying higher for longer than expected will constrain demand.
Those with houses on the market have become ‘more realistic’ about target selling prices as housing transactions are down, making it more of a buyer’s market.
While experts believe the current slow growth will continue into 2024, there is optimism for a return to further growth for real estate investors in the future.
Is Now a Good Time to Buy Property?
Although the UK property market is going through a period of stagnation, experts say the current situation is not a slump. Instead, after years of rapid growth, this market is simply correcting itself, and property is becoming relatively more affordable than wage growth.
According to Halifax, the house price-to-income ratio has been at its lowest since June 2020.
For those deciding whether property is still a good investment in 2023, it’s most important to look at overarching trends over decades rather than minor changes over a short period.
The UK property market is susceptible to short-term effects from economic and political irregularities, so it’s advisable to use long-term trends to judge a market’s performance. Read our guide to UK House Price Predictions for the Next 5 Years for more information.
The UK property market has proven itself consistent and stable historically. In recent times, it quickly overcame hits taken from events such as Brexit and the Covid-19 pandemic.
Therefore, many predict that further price falls may tempt buyers back into the market.
Those willing to make a long-term investment can buy property at a cheaper price point while the market is subdued and allows for significant capital appreciation over time.
Compared to the property market in London, Northern cities like Liverpool and Manchester have also proven popular with investors, seeing lower entry points, higher levels of rental yield and a predicted capital appreciation of 11.70% by 2027.
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