The answer may be more optimistic than you think, according to my assessment as the Principal at Mortgage321.
Although my previous discussions may not have centered on the housing market, recent forecasts align with a positive outlook.
Currently, predicting the market's direction is a challenge. The Office for Budget Responsibility paints a bleak picture with a projected 4.7 percent price drop this year. Knight Frank is not far behind, suggesting a 4% decrease. Considering these varying forecasts, the owner of an average property priced at £285,000 could face a £13,500 loss this year. It's no wonder homeowners and buyers are feeling uncertain.
So, who has the accurate forecast? The truth is, nobody can provide a definitive answer. The UK residential property market is a £9 trillion annual business influenced by currency fluctuations, interest rates, inflation, and various other factors.
Surprisingly, it has shown resilience, even during global challenges. While COVID-19 virtually halted the market, prices continued to rise. The Ukraine conflict pushed up inflation and mortgage rates, but the market did not crash as many had predicted.
However, it's increasingly safe to assume that the worst of the market volatility is behind us. Inflation is on the decline, base rates have remained stable for several months, and lenders are offering mortgage discounts – a relief for buyers and those coming off fixed rates.
Stamp Duty thresholds have been raised, exempting most first-time buyers from the tax. I would personally advocate for its complete elimination for downsizers, which would stimulate demand and address the supply shortage in many areas.
With the upcoming General Election, the property market will take center stage, boosting confidence. Both major political parties are likely to pledge substantial house-building programs and fiscal incentives to support first-time buyers. Efforts will also be made to assist Generation Rent. The availability and affordability of quality rental homes will remain a significant issue in 2024, and I anticipate continued rent increases, both in and outside of London.
So, my take on prices? I'm willing to take the risk and say it: recovery. As we approach spring, the market will gradually pick up momentum, bolstered by growing buyer confidence. By the end of 2024, I foresee prices being two to three percent higher than they are now, barring any major external disruptions.
In fact, the rise may be even more pronounced outside of London, with regions like the northwest and southwest already showing positive trends. This positive momentum is likely to continue.
In summary, I predict that 2024 will be a year of recovery for the housing market. And if I happen to be wrong, at least it will prove that predictions are indeed a challenging game.
Are you curious about the future of the UK housing market in 2024? Join the conversation!
Share your thoughts and questions in the comments below. Matthew Pigrome and the Mortgage321 team are here to provide insights and guidance on your homeownership journey. Let's navigate the market together and make informed decisions. Don't miss out on the latest updates and expert advice—follow us for more real estate insights!
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