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New House Price Index Offers Hope for the 2024 UK Housing Market

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    Gradual Capital Appreciation Promises a Better 2024 for UK Property

    According to the most recent e.surv house price index, there has been a gradual increase in capital appreciation towards the end of 2023, offering a potentially positive trend for the upcoming year.

    Following an extended period of high inflation, interest rate rises and subdued activity within the UK housing market, this should serve as welcome news for property investors looking to make money from rental properties for sale in the next 12 months.

    Let’s look at the latest e.surv data in more detail.

    Read more: If you want to expand your property investment knowledge, we have plenty of resources to keep you informed, such as our guides on how to buy a house through your business in the UK and the safest property investments.

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      How Did UK House Prices Look at the End of 2023?

      In December 2023, monthly house prices rose by 0.2%, bringing them to a level last observed in February 2022. The ongoing decline in inflation rates and its subsequent impact on mortgage pricing is slowly starting to influence the housing market. These figures mark the third month in 2023 with an average house price increase.

      For homes sold and completed in December in England and Wales, the annual average sale price experienced a decrease of £13,150 or 3.5%, a slight improvement from the 3.7% decrease in November.

      The estimated average house price at the end of the year was £362,187, approximately £13,200 lower than the previous year.

      However, considering the overall trend since the first pandemic lockdown in March 2020, which saw an increase of nearly £48,350 in prices, most property owners likely still gained considerable equity despite the price declines in 2023. So, despite much pessimism about UK property investment in 2023, the market performed remarkably well in the face of numerous external economic factors – good news if you are interested in making money in property.

      From November 2023, prices increased monthly in 47 Unitary Authority areas, indicating improved confidence in various housing markets across England and Wales, according to e.surv. Rutland experienced the most significant price increase in November at 3.5%, though low transaction counts may have influenced the data.

      This data encompasses all transactions, whether through cash or mortgage finance, providing a comprehensive overview of the entire market. Notably, this marks the first instance in the last 16 months where the annual rate has shown improvement over the previous month in an e.surv house price index.

      Find Out More: Are you interested in property investment? Use our rental income calculator to understand how much capital you could earn with your buy-to-let property.

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      What Can We Expect in the UK Housing Market over the Next 12 Months?

      Looking ahead, with no anticipated interest rate rises and potential cuts as early as May, coupled with the expectation of a pre-election budget addressing housing market concerns, borrowers are likely to continue benefiting from lower mortgage rates. Lenders are anticipated to compete for market share in a recovering market.

      While the inflation rates may have increased by 0.1% this month, this does not change the outlook for the rest of the year.

      According to Savills, if you’re a buy-to-let investor, you can expect rental growth of 6% in 2024. In addition, many forecasters predict a slight drop in property prices over the next 12 months. With mortgage rates becoming more affordable, this could be an opportune time to invest in property and take advantage of higher-than-typical gross yields.

      A look at the returns potential of different UK regions shows that the North West is expected to see significant ROI in 2024. Savills forecasts that the North West buy-to-let houses could see returns of 9.2%.

      Find Out More: Questions such as can foreigners buy property in the UK? and what are the best places to invest in property in the UK? are becoming more frequently asked by investors.

      Read More: Regarding buy-to-let regions, be sure to check out some of our handy area guides, including:

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      Dale Barham

      Dale is a property content writer at RWinvest. Keeping a close eye on the UK property market, Dale helps our readers stay informed and up to date on the latest market news and statistics.