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

When it comes to making a house price forecast for the remainder of 2024 and beyond, no one really knows what will happen. But there are numerous factors we can take into account 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 £293,000. It is forecast that UK house prices will increase 1.5%-3% during 2024.

What’s happening with house prices now?

Land Registry’s latest House Price Index report shows the average house price was £293,000. Our monthly House Price Watch tracking all of the major indices shows house prices up on average +0.8% over the past month and 3.6% over the past year. Stay up to date with what’s happening with house prices in our monthly House Price Watch.

Will house prices drop in 2024?

In terms of a house price forecast, at the start of the year it was widely expected that house prices would drop in 2024. However, despite some fluctuations in house prices in 2024 so far, it’s now expected that average house prices will increase in 2024.

• HomeOwners Alliance expects house prices to increase 2-3% this year with mortgage rates now more affordable.
• Zoopla’s house price forecast is that house prices will increase by 1.5% by the end of 2024. By comparison, at the start of the year, the property portal forecast that house prices would drop over the year by 2%.
• The reaction from homemovers to the first rate cut, combined with other positive data and trends, has caused Rightmove to raise their price prediction. They now expect new seller prices to rise by 1% over the whole of 2024 (they had originally forecasted a fall of -1%).
• Savills’ house price forecast is that average prices will increase by 2.5% over 2024. This is an improved outlook compared to the house price prediction it made in late 2023, which forecast that average house prices would drop by 3% this year.
• At the start of 2024, Nationwide said that if the economy remained sluggish and mortgage rates moderated only gradually, house prices would likely record another small decline or remain broadly flat (perhaps 0 to -2%) over the course of the year. While the lender hasn’t issued an updated house price forecast, its House Price Index shows the average house price has increased each month in 2024.
• Halifax said house prices could fall between -2% and -4% in 2024 at the start of the year, although as with recent years, it said forecast uncertainty remained high given the economic climate. The lender also hasn’t issued an updated house price forecast but its House Price Index shows prices have fluctuated slightly for the first 6 months of 2024.
• At the start of the year, David Hollingworth, associate director at L&C Mortgages agreed that house prices would fall but not significantly.
• The OBR’s house price forecast at the start of 2024 was for prices to fall by 4.7% during the year. However, it revised its house price forecast to say it now expects a fall of 2%. But it’s worth bearing in mind that its March 2023 house price forecast predicted prices would fall by 10% from their high in the fourth quarter of 2022 and that didn’t happen.

What will happen to the UK housing market regionally?

According to Land Registry data, house prices increased in all areas of the UK over the past month with the biggest rises in Northern Ireland (+3.6%), Wales (+2.6%), Yorkshire & Humber (+2.7%), the North West (+2.4%) and London (+2.2%).

House prices have also increased over the past year in all areas with the biggest rises in Northern Ireland (+6.4%) and Scotland (+5.4%).  Within England, house price shifts range from a low of +0.8% in the South West to a high of 4.6% in the North West. The RICS residential market survey expects house prices to gnerally rise across all parts of the UK in 2024.

Average house prices remain highest in London (£531K) and lowest in the North East (£166K).

Mortgage rates and house price forecasts

It’s very difficult to make an accurate mortgage rate forecast as this will depend on numerous factors.

Mortgage rates have been falling in recent months — lenders had started slashing mortgage rates following the Bank of England’s decision to finally cut the base rate in August 2024, taking it from 5.25% to 5%. However, in October 2024, the mortgage rate prediction from experts was that these mortgage rate cuts may be over and that fixed deal rates could start increasing.  

With the best mortgage rates higher than we’ve been used to in recent years, 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.

How will a house price drop affect your mortgage?

Even though the house price forecast is for prices to increase in 2024, regardless of whether this happens or not, there will also be regional and local variations in house prices. So what happens to your mortgage if your house price drops?

If the value of your house changes, 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 your house value 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 couple of years 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

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

HomeOwners Alliance CEO Paula Higgins says, ‘Looking back to around 18 months ago, predictions of a house price crash were being bandied about. But as the figures show – this didn’t happen.

‘Considering the difficult factors homeowners face, from increased mortgage costs and the cost of living crisis, it was little surprise that average house prices dipped slightly earlier this year. However, now some experts predict that house prices will increase in 2024. This will no doubt be helped along by the Bank of England’s decision to finally cut interest rates in August, as this has made the cost of borrowing cheaper.

‘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.’

Will house prices go up if interest rates fall?

Interest rates are widely expected to fall this year. When interest rates fall, mortgage rates normally fall too. If the cost of borrowing falls and people can afford to borrow more, it’s likely that this may have a knock on effect on house prices.

House price predictions for the next 5 years

Savills forecasts that the average UK house price will rise by a total of 21.6% by 2028.

I’m selling – will buyers expect a bargain?

Possibly. As there is some adjustment in the market you can expect buyers may 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.

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?

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