House price forecast: What will happen to the UK housing market in 2024

When it comes to making a house price forecast for 2024, no one really knows what will happen. But there are numerous factors we can take into account and experts we can ask to help make an educated guess, and in turn inform your decisions for your home – whether you’re selling, buying or staying put.

Katherine Binns Director, Research

UK house price forecast in summary

The average UK house price is £261,142.

It is forecast that UK house prices will drop 1%-3% during 2024.

What’s happening with house prices now?

Nationwide’s House Price Index shows the average UK house price in March 2024 was £261,142. This is up +1.6% compared to March 2024, when it was £257,030. Our House Price Watch report which tracks the major house price indices shows that house prices are down on average -0.3% over the past month and up on average +0.6% over the past year. Read more in our monthly House Price Report.

Will house prices drop in 2024?

In terms of a house price forecast, will prices continue to drop in 2024? Yes it looks likely. But by how much?

• HomeOwners Alliance which has been tracking house prices of the major indices in its monthly House Price Watch for the last ten years expects house prices to fall a further 1% in 2024.
• Nationwide expects that if the economy remains sluggish and mortgage rates moderate only gradually, house prices are likely to record another small decline or remain broadly flat (perhaps 0 to -2%) over the course of 2024.
• Halifax say house prices could fall between -2% and -4% during the coming year, although, as with recent years, forecast uncertainty remains high given the current economic climate.
• Rightmove predicts new seller asking prices will drop nationally by an average of 1% in 2024 with motivated sellers still needing to price below their local competition to secure a sale.
• Zoopla’s UK house price forecast is that prices will drop by 2% over 2024.
• Lloyds Banking Group’s UK housing market prediction is that prices will drop by a further 2.4% in 2024 before recovering.
• Housing expert and buying agent Henry Pryor’s house price forecast is for prices to slip by around 3% over the year. 
• David Hollingworth, associate director at L&C Mortgages agrees that house prices will fall but not significantly.
• The OBR’s house price forecast for 2024 is for prices to fall by 4.7% and unlikely to recover to their 2022 high until 2027. However, while it predicts the largest drop, its March 2023 forecast predicted house prices would fall by 10% from their high in the fourth quarter of 2022 and we have yet to see anything like that happen.

What will happen to the UK housing market regionally?

According to Zoopla, in 2023 the South of England ‘bore the brunt’ of house price falls but these falls are now spreading further. The property portal said that no markets are currently registering annual price falls of more than 5%. However, its house price forecast for 2024 is that ‘we expect to see an increase in markets registering 5% falls, as sellers continue to adjust their asking prices in the face of weaker buying power’.

Mortgage rates and house price forecasts

The mortgage rate forecast for 2024 is significantly calmer than this time a year ago when markets were still reeling in the aftermath former Prime Minister Liz Truss’s disastrous Mini-Budget. Mortgage rates on fixed rate mortgages have been falling for several months thanks to better than expected inflation data and the widely held expectation that interest rates have now peaked at 5.25%. Many experts believe the Bank of England will make the first of its cuts to the base rate in June 2024.

House price forecast: Should we expect the housing market to crash?

HomeOwners Alliance CEO Paula Higgins says, ‘Looking back to this time last year, predictions of a house price crash were being bandied about. But as the figures show – this didn’t happen in 2023.

‘Considering the difficult factors homeowners face, from increased mortgage costs and the cost of living crisis, it seems sensible to assume house prices will drop further in 2024. But after so many years of house price inflation, we think this is more likely to be a correction than a crash.

‘And when it comes to mortgages, we would encourage homeowners to frequently check they’re on the best mortgage rate. With the current cost of living crisis and the rate at which deals are changing, using a fee-free mortgage broker to do the hard work for you is a no-brainer.’

Housing experts’ UK house price forecasts for 2024

More uncertainty in 2024 – expect prices to slip by around 3%

Housing expert and buying agent Henry Pryor says, ‘2024 will be a year of uncertainty with a General Election looming and the real pain of rising interest rates being felt by more and more borrowers coming off fixed rate mortgages. 

‘I expect sale volumes to slide back under a million and prices to slip by around 3% over the year. 

‘Cash buyers will become more relevant with as much as 40% of deals involving a cash buyer. Mortgage lenders will fight for new business and I expect rates to soften but there isn’t much room for them to discount until the Bank of England moves to reduce rates which we are led to believe is unlikely to be before the summer.

‘Elections usually result in buyers and sellers sitting on their hands and waiting. More often than not there turns out to be no reason to wait but uncertainty is what all markets hate and the housing market is going to learn to despise it during 2024.’

The market is still baring its teeth

Jeremy Leaf, the principal of a long-established North London estate agency and former RICS Residential Chair, says, ‘[Nationwide’s] figures confirm what we’ve seen in our offices over the last month or so – the market is still baring its teeth. 

‘Despite a 15-year high in Bank of England base rates and continuing inflation, recent demand confirms buyers believe there is little chance of a market correction, although sales are taking longer and prices softening. Strong employment and wage growth are also supporting activity

‘We don’t expect to see much change in the next few months rather a gradual improvement as optimism always seems to become more apparent at the beginning of the year.’

Better mortgage outlook could see buyer confidence improve in 2024

David Hollingworth, associate director at L&C Mortgages, expects that house prices will fall but not significantly, as he expects buyer confidence could grow. He said, ‘As the rate outlook improves and mortgage rates stabilise and continue to improve, that could see buyer confidence begin to improve into 2024 which will likely see a soft landing.’

Cautious optimism means 2024 will begin more positively than 2023

Jonathan Rolande, Founder of the National Association of Property Buyers, adds: ‘2023 was the year the property market decelerated from the high-speed buying frenzy of the previous two years. The often predicted price crash has not happened thanks to, amongst other things, a shortage of supply, bank forbearance and growing confidence in the final quarter as lending rates settled.

‘This cautious optimism means 2024 will begin more positively than the previous year. We can expect prices to stop their descent as activity gradually picks up. There are many variables, but at this time, even this property market pessimist thinks that prices may end the year higher than they started.’

How will a house price drop affect your mortgage?

If the house price forecasts are correct and the value of your house reduces, so does the amount of equity you have in it. You’ll usually need at least a 5% deposit to get a mortgage, although ideally you would have at least 10% to get access to a better choice of deals. And the best deals usually need a deposit of 40%.

If you have a big chunk of equity in your home, a small reduction in it may not have much of an impact in terms of the number of remortgage deals you can get access to. But if you bought a property in the last year with a small deposit, a drop your house’s value may cause you difficulties in remortgaging if the drop in value means you have less than a 5% deposit.

Get fee-free mortgage advice from our partners at L&C. Start online or give them a call today about your mortgage needs

Will mortgage rates go down in 2024?

Mortgage rates have increased significantly since the Bank of England started increasing the base rate of interest in 2021. But just like with house price forecasts, no one knows for sure what will happen with mortgage rates and experts have certainly been proved wrong in the past.

In July 2023 we saw lenders reducing their mortgage rates on the back of promising inflation data, and this trend has continued into February 2024, with sub 5% fixed rate mortgage available on 2, 3, 5 and 10 year mortgages. But rates are changing fast; you can track the best deals on our best mortgage rates page.

It’s more important than ever to make sure you’re on the right mortgage, and if you’re due to remortgage to not stick your head in the sand. Get fee-free mortgage advice from our partners at L&C. Start online or give them a call today about your mortgage needs

Will house prices fall due to rising interest rates?

Despite recent falls, mortgage rates remain significantly higher than the ultra-low rates we’ve seen in recent years. As a result, if you’re taking out a mortgage, it will typically be much more expensive. So it seems fairly safe to assume that if many people are taking out smaller mortgages as a result, and therefore their budgets will be smaller, that this may have a knock on effect on house prices.

House price predictions for the next 5 years

So what about longer term house price forecasts? Assuming that interest rates peak then ease from mid-2024, Savills is forecasting that house values will start to recover and that the average UK house price will rise by 6% over the next five years.

I’m selling – will buyers expect a bargain?

Yes, there is some adjustment in the market so you should expect buyers will be looking to negotiate. And while you obviously don’t want to sell too cheaply you’ll want to be realistic about what your home is worth. This is especially true if you’re selling to someone who needs a mortgage. Their mortgage lender will carry out a mortgage valuation survey – and if the property is ‘downvalued’ down the line this will slow you down.

And in the current market it’s more important then ever to choose the right estate agent to sell your house. Make the right choice and you may sell faster and pay less in fees. To help you do this, we’ve designed the Best Estate Agent Finder tool. It allows you to compare fees, the average time to sell a property like yours, how often they achieve the asking price and how successful they are at selling similar homes.

What is negative equity?

Negative equity occurs when the market value of your house is below the outstanding mortgage secured on it. It’s more common when house prices are falling and is a major concern when you want to sell your home. If you bought your home recently and with a small deposit you may be at more risk of falling into negative equity. Find out more in our guide What to do about negative equity?

Frequently Asked Questions