This year’s housing market has performed better than many had anticipated, with asking prices declining less than predicted and strong buyer demand for reasonably priced properties. However, many buyers planning to move will now find it more expensive due to rising mortgage and interest rates. 

The average asking price of a home in Great Britain is now slightly more than £355,000. 

Will asking prices fall in 2024? 

Following the chaotic post-pandemic period, the housing market is still gradually returning to more typical levels of activity. As sellers compete more to find a buyer, we forecast that by the end of 2024, the average asking price for new sellers will be 1% lower nationwide. 

2024 will likely be another muted year for the housing market, however, this year’s better-than-expected activity has demonstrated that many buyers are still moving forward with meeting their housing needs. In 2024, we project a slight average decline of 1% in new seller asking prices. It’s unlikely that prices will decline even more next year given the underlying level of strong demand at the appropriate price. 

Thousands of local markets, each with a distinct supply and demand dynamic, make up the housing market. Certain parts of Britain will feel the effects of the anticipated decline in new sellers asking prices more strongly than others. We might observe new seller asking prices staying the same or even slightly rising in areas where there are fewer homes for sale than there were this year. 

We are likely to witness even more competitive pricing in areas where sellers are finding it difficult to draw in buyers who are stretched financially or who need to sell quickly because of a change in circumstances, a new job opportunity, or a strong desire to relocate. 

If you’re selling a home in 2024, pricing will be key. 

The level of sales being agreed is 10% lower than at this time in the more normal market of 2019.  This year, we’ve also seen 39% of properties with an asking price reduction during marketing, compared to 29% last year, and 34% in 2019. 

The average time for a seller to find a buyer has jumped from 45 days this time last year, to 66 days now. Home sellers who have been competitive on price have been able to find a buyer more quickly. 

Instead of starting too high and having to lower later, new sellers will need to compete with their low-cost neighbours and work with their estate agent to set a competitive starting price. According to our research, setting prices correctly from the start maximises the initial impact on local buyers and increases the chances of a successful sale for new sellers. 

What’s happening with mortgage rates? 

In contrast to the more unstable mortgage market of this time last year, average mortgage rates have now been falling steadily since July, giving home-movers much more stability and certainty over the kind and cost of mortgage offer they are likely to receive. Currently, the average fixed rate for two years is 5.48%, and the average rate for five years is 5.07%. 

The mortgage market is much calmer even though mortgage rates are still high in comparison to recent historically low levels. Buyers who had to put off their plans to move into a new home earlier in the year may decide that the beginning of 2024 is the right time to go back now that they can better plan for what they can afford. 

Even though there are indications that the Bank of England Base Rate has peaked and the outlook for mortgage rates has improved, many homebuyers are still struggling with affordability. The Bank has stated that base rate reductions are not expected anytime soon and that high-interest rates will probably persist through 2024, which will probably continue to reduce the purchasing power of some home buyers. 

More choice for homebuyers in 2024. 

In contrast with the stock-starved pandemic years, buyers are far more likely to find a choice of homes in their area that meet their needs. In 2024, prospective buyers will have the advantage of negotiating a lower asking price and having more time to select the ideal property. 

However, the quantity of properties available has only recently returned to pre-pandemic levels, and there are no indications that a flood of new listings will result in an overabundance of properties on the market. Sellers who are willing and able to price competitively will draw in buyers in an environment where there are fewer buyers and more options available. 

A mortgage calculator can help you determine how much you could borrow if you plan to move in 2024. Additionally, you can apply for a mortgage in principle to receive a personalised outcome and move one step closer to receiving a mortgage offer. 

Additionally, you can look at the various kinds of mortgages and learn how to select a mortgage term that will work for you now and in the future. 

Author: Jag Chaggar