Review of the UK property market in 2023
Key takeaways:
The average house price in the UK is now £283,615, down £2,713 from £286,328 a year ago.
The house price growth rate in 2023 is -10%(as of November). During 2023, this is as high as +21% (January and February), as low as -45% (August and September).
The average house price in 2023 is £44,439 (+18.) higher than it was at the start of the pandemic (£239,176 in March 2020).6%）。
First-time buyers are buying a slight increase in home prices compared to 2022 (+0.).5%）。
As of November 2023, Northern Ireland's annual property ** inflation rate is +23%, the highest of any region in the UK. The largest drop was recorded in the South East of England at -57%。
Over the past decade, the average UK house price has increased by +59% (from £178,501 in November 2013),* by £105,114.
Halifax Bank of Halifax (a bank owned by Lloyds Banking Group, the UK's largest mortgage lender), said that UK real estate** in 2023 was better than expected, with an annual decline of just -10%, with an average house price of £283,615. But this is mainly due to the shortage of available ***, not the strong demand from buyers. The average house price at the end of 2023 was just 3% below its peak in August 2022 (£293,025), but £44,000 above pre-pandemic levels.
Inflation and high interest ratesIncrease the financial pressure on the familyaffected the affordability of housing, leading to:Reduced trading volume。The Bank of England has increased its benchmark interest rate from 0The all-time low of 1% has been raised 14 times. The current benchmark interest rate is 525%。As a result, mortgage rates have skyrocketed. High fuel**, energy costs and taxes** are also putting pressure on household budgets.
Halifax Home Price Index.
Average property prices in the UK: November 2022 – November 2023.
UK macroeconomic performance in 2024**
According to the Office for National Statistics (ONS), in the second quarter of 2023, the UK's GDP grew by 02%, the UK economy is now 08%。
The most recent ** indicates,With energy** stable and inflation continuing to fall, the UK will avoid a recession. The ** for GDP growth in 2024 remains conservativeKPMG** 2024gdpGrowth of 11%
The British Chamber of Commerce's (BCC) latest quarterly economic survey shows a significant rise in business confidence since 2022, which could lead to an increase in investment. BCC now**, business investment will grow by 13%, up from 02% is corrected.
Finally, the UK Business Council cautioned that growth will remain low.
UK property market outlook for 2024
Keywords:Inflation is falling, interest rates are falling, and the economy is recovering
Key takeaways:
Many experts and institutions** believe that there will be ** house prices in the UK property market in 2024**, but the estimate of the size of ** is relatively conservative;
Given the broader economic challenges and the likelihood of continued modest downward pressure on house prices, Halifax expects UK house prices to be **2%-4% in 2024
By the end of 2024, mortgage rates are expected to fall back to 45%；
withInflation is coming downwithMortgage rates have fallenMarket confidence and trading volumes are expected to partially recover in 2024
Wage continuity** will be the main factor supporting housing market sales in 2024;
As in recent years, uncertainty remains high given the uncertainty of the short-term economic outlook;
As rents continue**, the largest group of buyers in 2024 will be cash buyers, followed by first-time buyers.
Here's what different agencies say about UK house prices in 2024:
Robert Gardner, chief economist at Nationwide, said: "If the economy remains sluggish and mortgage rates only gradually slow as expected, home prices could be small again** or broadly flat in 2024. ”。UK house prices will remain unchanged or average by 2% in 2024.
The UK's largest building society said it also expects UK house prices to fall "low by single digits", but added that house prices are likely to remain "broadly flat".
Real estate **zoopla** only**2%.
The level of interest rates
Much of the movement of the housing market and home prices in 2024 will depend on mortgage rates. At its most recent meeting, the Bank of England opted to keep its benchmark interest rate at the current 525% level. But inflation is falling faster than **. This could mean that interest rates will soon follow. By the end of 2024, mortgage rates are expected to fall back to 45%。
Given the vastly reduced reliance on mortgage debt, and the relative value offered to a range of affluent domestic and international buyersCentral London is expected to see the least downward pressure on house prices next year
Average UK mortgage rates 2000-2023.
Annual rental market expectations
Over the past few years, both landlords and tenants have been hit hard by rising interest rates. As landlords try to compensate for the cost of rising mortgage rates, tenants are feeling the combined pain of rising living costs and rising rents.
According to the real estate portal Zoopla, the average cost of a new rental home has increased by 31% over the past three years. This equates to an average of £3,360 per year.
Zoopla predictsThe market in 2024 will be more "balanced"., which will benefit the tenant. Zoopla**, annual rent growth will slow to 5% by the end of 2024, which would be the slowest growth since September 2021.
Savills expects rents to be **6% in 2024, which is expected to be more than double the revenue growth rate and down from 9% in 20235%。The company** rent** will slow down in the coming years as tenant "affordability caps" will affect subsequent rental growth.
Bottom line: The UK property market will be challenging but resilient in 2024. The interest rate cuts expected to start in the second half of 2024 will bring an inflection point to the property market, making it an important time to invest in UK real estate.