The 2023 House Price Drop

In this blog, we look at what happened in the housing market with house prices last year and look ahead at the forecast for 2024.

It is fair to say that 2023 didn’t see a property price crash, but prices did drop as the cost-of-living crisis and increased mortgage rates impacted on buyer’s budgets, while those wanting to sell up dropped their prices to attract interest.

The Office for National Statistics (ONS) shows the average house price dropped by 1.2% in the 12 months from October 2022 to October 2023. Whilst data from property search site, Rightmove confirms that the average asking prices fell by 1.9% between November and December, which was a sharper drop than normal as sellers attempted to entice buyers to view their homes during the festive period. Another property search site, Zoopla stated that house prices have fallen across 80% of the UK as the cost-of-living crisis affected demand and budgets as higher mortgage rates impacted their affordability and buying power.

With the property market facing a rather big challenge, we ask what is in store for 2024 the truth is, no one can be certain what will happen but it looks likely that the prices will continue to drop:

• Nationwide expects that due to mortgage rates house prices may go down 0-2% throughout 2024
  
  
• HomeOwners Alliance expects house prices to fall a further 1% in 2024
  
  
• Zoopla predicts a 2% price drop in the UK
  
  
• Rightmove believes the seller’s asking prices will be 1% lower nationally by the end of 2024
  
  
• Lloyds Banking Group predicts that the prices will drop by a further 2.4% in 2024

Though there is some uncertainty around what will happen this year, most experts do not expect a housing market crash to take place. With inflation falling faster than anticipated, we are hopeful that the Bank of England could start cutting the base rate this year meaning better affordability for those looking to buy.