2023: A Year of Resilience
2023 has been a year that defied expectations. While many predicted a significant drop in asking prices, the market showed remarkable resilience. New seller asking prices fell by just 1.1% year-on-year, a far cry from the anticipated 2% decline. The average asking price for a home in Great Britain currently hovers just above £355,000.
2024: What to Expect
As we look ahead to 2024, the housing market appears to be returning to a more stable state after the post-pandemic frenzy. Projections suggest that average new seller asking prices will dip by 1% by the end of the year. This modest drop is attributed to increased competition among sellers, each vying to secure a buyer.
Tim Bannister, property expert, weighs in: "It’s likely to be another muted year for the market, however, the better-than-anticipated activity this year has shown that many buyers are still getting on with satisfying their housing needs. We predict a modest average 1% fall in new seller asking prices in 2024. The underlying level of good demand at the right price makes it unlikely that we will see a more significant drop in prices next year."
“Our forecast is based on extensive market data and insights from estate agents and industry experts. However, it's important to note that the housing market is comprised of thousands of local markets, each with its unique dynamics of supply and demand. Some areas may experience flat or even slightly increasing asking prices compared to the previous year.”
"In areas where sellers are struggling to attract affordability-stretched buyers, or needing to sell quickly due to a change of circumstance, new job opportunity, or strong desire for a lifestyle change, we are likely to see even more competitive pricing," adds Tim.
Pricing Is Key in 2024
The number of sales being agreed upon is 10% lower compared to the more stable market of 2019. This year, 39% of properties had asking price reductions during marketing. The average time to find a buyer has increased from 45 to 66 days over the past year.
For sellers in 2024, pricing will be paramount. Competing with neighbors who have priced their properties competitively is essential. Research indicates that pricing right from the outset maximizes the initial impact among local buyers and significantly increases the chances of a successful sale.
Mortgage Rates and Affordability
Average mortgage rates have steadily declined since July, offering home-movers more stability and certainty. The average two-year fixed rate now stands at 5.48%, while the average five-year rate is 5.07%. Although rates are higher than the historically low levels seen in recent years, the mortgage market is much calmer.
However, despite improving mortgage rates, affordability remains a challenge for many home-buyers. The Bank of England has indicated that Base Rate cuts are not imminent, and interest rates are expected to remain elevated throughout 2024. This could limit some home-buyers' spending power.
More Choice for Home-Buyers
Buyers entering the market in 2024 will benefit from a more substantial selection of homes compared to the stock-starved pandemic years. With more choice and fewer buyers, those sellers who price their properties competitively will attract attention.
While the number of available homes for sale has increased to pre-pandemic levels, there is no indication of a flood of new listings that would lead to an oversupply of homes. For sellers and buyers alike, the market's dynamics will continue to evolve in the coming year.
As we look ahead to 2024, the housing market remains a dynamic and ever-changing landscape. While challenges persist, opportunities abound for those who navigate the market wisely. Whether you're buying or selling, staying informed and working with the right professionals will be crucial in achieving your property goals.
