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UK house prices to drop in 2024, predicts Rightmove

House prices London- Terraced residential houses in Fulham SW6 area of south west London. Photo: PA/Alamy
House prices: average new seller asking prices dropped to £355,177 this December. (William Barton)

The average UK house price is expected to ease by 1% over the next year as mortgage rates continue to drop, giving some relief to those trying to jump on the housing ladder.

Prices for properties hitting the market are expected to drop by an average of 1% in 2024, according to Rightmove.

The pressure is on sellers to price under the competition to secure a buyer as affordability remains stretched, the property site said.

“With mortgage rates more settled and on a slow downward trend, potential movers who have been biding their time and waiting for calmer market conditions may decide to act in the early part of next year,” said Tim Bannister, Rightmove’s director of property science.

Read more: UK households expect Bank of England to hike interest rates in 2024

“Rightmove’s research and agent feedback is that the best strategy to sell in the current market is to price temptingly at the outset of marketing, rather than testing the waters with a higher price. This will hopefully avoid the need to reduce your asking price later, and capture that early-bird buyer’s interest in the new year, whilst also avoiding the stress of drawing out the selling process and risking having the for-sale board still up at Easter,” he added.

This December, the average new seller asking prices fell by 1.9%, or £6,966, to £355,177 as most sellers price to sell ahead of the new year.

The average new seller asking prices are higher in seven out of 11 areas across Great Britain compared to a year ago, with the North West leading the way at 1.5% higher than last year, and the South East being the worst performer at 3.7% below 2022.

The number of sales agreed in the year to date is just 13% behind the same period last year, a better-than-expected figure. The market has been hit with high mortgage but rates have started to ease in recent months as the Bank of England appears to have reached the peak of the rate-hiking cycle.

Average mortgage rates have now fallen for 19 consecutive weeks, with the average five-year fixed mortgage rate now 5.11% compared to 6.11% in July.

Read more: UK house prices rise in November amid property shortage

Meanwhile, two-year fixed rate mortgages have dipped below 6% for the first time since 19 June this year.

Sarah Coles, Yahoo Finance UK columnist and head of personal finance at Hargreaves Lansdown, said: "This could help bring a chunk of buyers back to the market. It would be balm for the agony suffered by sellers over the past few months, as their properties sit unseen on the market and their for-sale signs collect grime. However, we can’t expect to see the impact in house price figures until the spring."

Rightmove said that as mortgage rates fall, the market will see more family movers who want to trade up for more space.

There are signs this is already happening, with demand in the mid-market second-stepper sector (all three and four bed properties, excluding four bed detached houses) up by 9% versus the post-mini-budget period of this time last year, compared with overall demand being up by 6%.

“We entered this year under a cloud of uncertainty, as the fallout from the autumn mini-budget filtered through to lower activity levels. High mortgage rates which have added to already-stretched buyer affordability have been a challenge throughout 2023 and this is likely to carry into next year.

“However for now, there appears to be more calm and certainty heading into 2024, and the annual fall of 1.1% in asking prices highlights the market’s much-better-than-predicted resilience this year,” Bannister said.

Watch: House prices show further growth after pause in interest rate hikes, Nationwide says

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