Jackson-Stops, a national estate agency, forecasts general stability in UK mainstream house prices for 2024. According to their analysis, about two-thirds of their agents predict stable prices, while one-third foresee modest declines.
The prediction hinges on several factors, including long-term mortgage rates, supply levels, and the potential UK General Election.
Key drivers like upsizing families and downsizing retirees are influencing property sales, with the East of England and South West being popular choices due to their value for money and lifestyle offerings.
Nick Leeming, chairman of Jackson-Stops, notes that despite the uncertain economic backdrop, the property market shows resilience.
A minor reduction in property values, possibly under 5%, is expected, potentially aligning house prices with pre-pandemic levels.
Leeming said: “Another unpredictable year for the property market has passed, proving that the only thing that is certain is uncertainty. Despite a challenging economic backdrop with mortgage rates impacting buyers’ and sellers’ plans which has prompted some to take a ‘wait and see’ approach, the property market continues to show signs of enduring strength. We expect a minor reduction in property values at worst, under 5% over the year, which will bring some house prices back in line with pre-pandemic levels.
“Transaction speeds have slowed significantly. All the skills that we employ to progress sales are having less impact than in previous years. Surveys are being treated warily by buyers – all the characteristics of a stickier market. But with the prospect of interest rates going down next year and a greater pipeline of supply which is likely to increase further in Spring 2024, there are reasons to expect a better market emerging as the year progresses. It is important that sellers continue to accept realistic valuations, reflecting a market that has greater competition once again.
“The possibility of a General Election in 2024, as early as May 2024, could cause buyers to pause and hold off making a long-term commitment until they know the impact and the chance of changes to housing policy. Though the reality of the housing market is that while those not pressed to move can delay a purchase, a change in lifestyle or circumstance ensures that a steady stream of transactions will take place throughout 2024, to levels seen in pre-2020.Â
The report also touches on the country house market, where energy efficiency and proximity to schools are top priorities. High interest rates and mortgage lender caution over affordability are influencing property listings and sales. The Cotswolds remains a stable market due to its enduring appeal.
In terms of lettings, fierce competition and landlord exits are shaping the country house lettings market. Jackson-Stops anticipates rent increases, especially in the lower end of the market, and a varied impact of the Renters Reform Bill on the market.
In the London lettings market, a surge in demand is expected in early 2024, driven by a variety of renters, including downsizers and relocating employees. Increased rents have raised tenant expectations regarding property conditions. Long-term tenancies are preferred for stability.
Regarding the London sales market, a mix of rising interest rates and stabilizing mortgage rates has characterized the past year. The influx of first-time buyers and lender flexibility are notable trends. Cash purchases continue to be significant, and confidence in borrowing is on the rise.
Finally, the new homes market is seeing a resurgence of sales incentives, previously unnecessary during the pandemic’s market boom. Buyers are increasingly prioritizing green property features, and housebuilders are focusing on effective pricing and perks to drive sales in a balanced market.
