eXp UK has revealed that prolonged market uncertainty due to rising interest rates is expected to shrink the estate agency sector in 2024.
However, 2025 could show improvement and a reversal of current trends.
The total market size stood at £15.325bn in 2023, up by 1% from 2022.
The size of the UK estate agency sector grew by 13.9% from 2021 to 2022, but this growth slowed to 1% between 2022 and 2023.
The market is expected to decline by 0.4% in 2024, bringing the total market size to £15.265bn.
Despite this, in 2024, mortgage approvals and house prices started to rise, with market sentiment boosted by the first interest rate cut since 2020, and more cuts likely before the year ends.
As a result, the total market size of the estate agency sector was forecast to reach £15.389bn in 2025, marking a 0.8% annual increase and placing it 14.5% above the levels seen in 2021 before interest rates began to rise.
Adam Day, head of eXp UK, said: “The UK property market has weathered a fairly difficult period since interest rates first started to climb and so whilst a retraction in estate agency market size is expected in 2024, it certainly doesn’t look to be the notable correction that many so widely predicted.
“2024 has already proved to be a far more positive year, with buyers returning with greater confidence and house prices starting to show signs of positive growth.
“Of course, it takes time for this improving sentiment to filter through and for momentum to build across the sector as a whole, so we expect that the current market uplift won’t become truly apparent until next year.”
