UK House Prices To Fall 2%-4% This Year: Halifax
LONDON – UK house prices experienced a third consecutive month of growth in December, primarily due to a shortage of available properties. However, a survey conducted by Halifax, a subsidiary of Lloyds Bank, and S&P Global predicts a slump in house prices in 2024.
In December, house prices rose by 1.1% compared to the previous month, surpassing the expected 0.1% increase predicted by economists. Year-on-year, house prices increased by 1.7% in December, marking the first growth in eight months.
The average cost of a UK home in December was £287,105, which is an increase of £3,066 from November. This is the highest level recorded since March.
Halifax’s director stated that the housing market exceeded expectations in 2023, with a 1.7% increase compared to the previous year. The average property price is now £4,800 higher than it was in December 2022.
However, the forecast for 2024 reveals a new trend. Halifax expects house prices to decline between 2% and 4% throughout the year. Nevertheless, the forecast comes with high uncertainty due to the current economic climate.
Halifax Mortgages Director Kim Kinnaird believes that the recent growth can be attributed to a shortage of properties rather than strong buyer demand. However, Kinnaird notes that with the easing of mortgage rates, there may be an increase in buyer confidence in the coming months.
Due to ongoing economic instability, the UK housing market is likely to reflect caution from buyers and sellers throughout 2024. Kinnaird points out that wage growth is now above inflation, leading to improved housing affordability for some. However, interest rates are expected to remain high as long as inflation exceeds the Bank of England’s target.
Data from the survey revealed that Northern Ireland is the strongest-performing region in the UK, with house prices increasing by 4.1% annually. London, on the other hand, maintained its position as the region with the highest average house price in the UK, standing at £528,592. However, London experienced a 2.3% annual decline in prices.
Experts suggest that the decline in house prices expected in 2024, along with the cautious attitude of buyers and sellers, are consequences of the broader economic climate. Despite the recent growth and shortage of properties, the uncertain future of the market calls for careful consideration.
In summary, UK house prices demonstrated growth in December 2023, but the forecast for 2024 suggests an upcoming decline of 2% to 4%. While the recent growth may be driven by a shortage of properties, the cautious attitude of buyers and sellers reflects the larger economic uncertainties at play.
Note: The information presented is based on a survey conducted by Halifax and S&P Global.
