House prices forecasted to drop again in 2024

House prices

The estate agency forecasts that UK house prices will drop by an average of 3% in 2024, although the firm says there are growing signs that buyers are gaining confidence as mortgage rates drop

In the run-up to Christmas it was clear to housing market analysts that mortgage affordability was continuing to place downwards pressure on house prices, and that trend looks set to continue, according to Savills.

The estate agency forecasts that UK house prices will drop by an average of 3% in 2024, although the firm says there are growing signs that buyers are gaining confidence as mortgage rates drop.

Savills’ latest survey of over 1,400 prospective buyers and sellers – which closed last week – shows commitment to moving home is at its strongest level for over a year. A net balance of 30% of respondents say they are more committed to moving home over the next six months, up from 14% in July 2023.

This is especially true amongst debt-dependent buyers as mortgage rates have begun to come down, bringing the prospect of fixing into lower borrowing costs.

When asked why they felt 2024 was the right year to make a house move, most respondents – 57% – said they “just want to get on with life”, a further 31% felt affordability had improved or house prices looked to be bottoming out, whilst a further 12% said they would rather have money invested in property than elsewhere.

Frances McDonald, research analyst at Savills, points out that her company’s findings chimes with the latest data from RICS (December) which shows that new buyer enquiries are at their strongest since April 2022.

When asked specifically about the motivations behind their move, FTBs were most likely to state that they had finally saved up enough on their own for a deposit (32%) or were spending so much on rent they would instead invest in their own home (26%).

Nearly half – 47% – of downsizers are motivated to move because they feel that their current home is too big to suit their needs, while 15% said that they wanted to release equity from their current home for retirement, and 12% want to move to be closer to local amenities and transport.

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