As we step into 2024, the housing market presents a landscape shaped by a series of unprecedented global and UK-specific challenges.

The past few years have witnessed a seismic shift in the market, driven by fluctuating inflation rates, shifting interest rates, and the lingering aftereffects of the COVID-19 pandemic.

These economic indicators, coupled with the ongoing reverberations of Brexit and a pressing cost-of-living crisis, have created an atmosphere of uncertainty and anticipation in the housing market sector. 

In this context, the burning question for homeowners, buyers and investors alike is whether 2024 will tilt the scales in favour of a buyers market or a sellers market. Will the pendulum swing towards buyers, offering more choices and bargaining power or will it favour sellers, with higher prices and quicker sales?

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What happened in the housing market in 2023?

In 2023, the housing market was a testament to endurance amidst economic headwinds. Characterised by high inflation and escalated interest rates, it posed significant challenges for buyers, sellers and investors alike. 

The inflation surge, a global phenomenon, not only squeezed household incomes but also led central banks, including the Bank of England, to adopt a hawkish stance on interest rates. This move, aimed at tempering inflation, inadvertently increased the cost of borrowing, impacting mortgage rates and by extension, the housing market.

Despite these economic tribulations, house prices displayed a remarkable resilience. Contrary to expectations of a steep decline, house prices in many areas remained steadfast or even experienced modest increases. 

This unexpected buoyancy can be attributed to a confluence of factors, including a persistent shortage of housing supply and the sustained appeal of housing as a secure investment amidst volatile financial markets. 

Consumer behaviour in 2023 was significantly moulded by these economic currents. The elevated interest rates led to a more cautious approach among potential buyers, many of whom opted to delay purchases of a market cooldown.

Sellers, on the other hand, faced a dichotomy: while some hastened to lock in profits fearing future price drops, others withdrew from the market, waiting for more favourable conditions. 

The mortgage sector, reacting to the broader economic environment, saw fluctuating rates, with a trend towards incremental decreases in the latter part of the year, providing a glimmer of hope to prospective buyers.

This interplay of market dynamics set the stage for the complex landscape that 2024 inherits - a scenario ripe with both challenges and opportunities. 

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What is the housing market forecast for 2024?

Housing market pundits are cautiously optimistic, predicting a market that is slowly stabilising from the rollercoaster ride of the past few years. However, the trajectory of this stabilisation varies across different regions, with national trends often diverging from local market realities. 

On a broader scale, experts anticipate a gradual softening of house prices nationally, influenced by the stabilising effects of a potentially more balanced supply and demand equation. 

According to the latest analysis by Rightmove, the UK housing market is poised to gradually stabilise from the heightened levels of activity observed in the “frenetic post-pandemic period.” 

This transition towards normalisation is expected to impact the dynamics between buyers and sellers significantly. Rightmove forecasts that by the end of 2024, the average asking price for sellers nationwide will witness a modest decrease of about 1%. 

This anticipated decline in asking prices is largely attributed to an increase in competition among sellers, as they strive to attract buyers in a market that is recalibrating towards pre-pandemic conditions.

The shift reflects a market that is moving away from the vendor-heavy dynamics seen during the pandemic, characterised by rapid sales and escalating prices, towards a more balanced arena where buyers may find more room for negotiation and choice.

The London housing market forecast 2024

A key factor posed to significantly impact the London housing market in 2024 is the impending general election. Property experts suggest that the election could introduce a period of uncertainty, potentially causing temporary hesitancy among buyers and sellers. 

The anticipation of policy changes, depending on the election outcome, is expected to play a critical role. Speculations are rife about potential reforms in housing policies, tax amendments and regulatory changes, all of which could have profound effects on market dynamics. 

Regional housing market forecast 2024

The regional variation in the UK housing market for 2024 presents a complex and diverse picture, according to various forecasts. While the overall trend suggests a movement towards stability, the nuances in different regions paint a more intricate picture. 

In some areas, local demand and supply imbalances could lead to a continued escalation in house prices. 

For example, regions with strong local economies and high demand, possibly due to factors like employment opportunities or desirable living conditions are expected to maintain or even increase their property values. 

On the other hand, areas still recovering from the economic repercussions of the pandemic might experience stagnation or a modest decrease in house prices. The National Association of Property Buyers provides a broader perspective, projecting an average fall in house prices across all UK regions ranging from 1.5% to 4%.

However, this trend isn’t uniformly distributed as many towns and cities, particularly those outside of London, are anticipated to witness a monthly rise in property values throughout 2024. Indicating a potential shift in the property hotspot landscape, moving away from the traditional dominance of London and the South East.

In the North, cities like Halifax, Bolton, Liverpool and York are particularly well-positioned for growth in the housing market. These areas are likely to benefit from various factors, including more affordable housing prices compared to the national average, which could attract a larger pool of buyers.

Conversely, regions in the South East, such as Kent or Essex, might find the market more challenging. Despite their proximity to London and traditionally high property values, these areas could face difficulties in maintaining price growth, possibly due to market saturation or affordability issues. 

Mortgage rates & buyer affordability in 2024

The trajectory of mortgage rates in 2024 remains a pivotal factor influencing buyer affordability in the housing market. After the fluctuations witnessed in previous years, particularly the spikes in 2023, the mortgage landscape in 2024 seems to be entering a phase of relative stability.

The stabilisation, however, does not necessarily imply a return to the historically low rates seen in the pre-pandemic era but rather a more moderate level that balances economic growth concerns with inflationary pressures.

The Bank of England’s monetary policies are at the heart of these mortgage rate trends. In response to the high inflation rates of the previous years, the BoE’s strategy has been cautiously focused on tightening monetary policy, primarily through raising interest rates.

This approach, while vital for controlling inflation, has a direct bearing on lending rates, including mortgages. Looking into 2024, the Bank’s future decisions on interest rates will hinge on various economic indicators, particularly inflation trends and the overall economic growth trajectory. 

If inflation begins to ease, we might witness a loosening of monetary policy, which could translate into more favourable mortgage rates. 

Comparatively, current mortgage rates, although higher than the record lows of the early 2020s, are still relatively moderate when viewed against the backdrop of historical figures. The current rates reflect a correction from the extreme lows fueled by emergency economic measures during the pandemic. 

For buyers, this means that while affordability may not reach the ease of the early pandemic years, it is also not constrained by the high rates characteristic of more volatile economic periods.

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What does a buyers market look like?

A buyers market is usually characterised by high inventory, lower house prices, longer sale times and more negotiating power for buyers.

In the case of high inventory, this is where there are more homes for sale than there are buyers. This surplus often results from a slow-down in the housing market, where properties stay on the market for longer periods of time. 

Due to the higher inventory, sellers may need to lower their asking prices to attract buyers. This can lead to homes selling for less than their listing price or their value in a more balanced market. 

Homes tend to stay on the market for a longer time before they are sold. Sellers may experience longer wait times to find a buyer willing to meet their price.

In a buyers market, buyers have more leverage over negotiations. They may be able to negotiate lower prices, better terms or concessions like seller assistance with house repairs or furniture included in the sale. 

Why do buyers markets occur?

There is generally less competition amongst buyers, and buyers are less likely to find themselves in bidding wars as they may have more options to choose from. 

A buyers market often coincides with broader economic downtrends, such as higher unemployment rates or economic uncertainty which can reduce the number of active and motivated buyers in the market. 

Because the competition is lacking, some buyers will feel less pressured to make quick decisions, and the likelihood of properties being snatched up quickly is lower. 

Furthermore, higher mortgage rates can reduce the number of eligible or interested buyers, as borrowing costs increase. This can lead to a surplus of homes on the market, as fewer people are looking to buy.

What can sellers in a buyers market do?

In a buyer’s market, sellers can adopt several strategies to enhance their chances of a successful sale. Being realistic about the market conditions is vital, and setting a competitive price from the outset can attract more attention from potential buyers.

Overpricing can lead to the property being overlooked, even if it’s otherwise ideal. Presenting the home in the best possible condition is crucial; completing necessary repairs and considering home staging can make a property stand out in a crowded market. 

Sellers should also be prepared to negotiate, not just on price but on terms as well, to make the deal more appealing. 

Maximising exposure is key, so ensuring the property is well-marketed is essential. This involves working closely with a reputable estate agent who not only knows the market well but can also provide valuable advice on pricing, marketing and negotiation. 

They can leverage their network for home improvements and ensure the property reaches the widest audience possible. In essence, in a buyer’s market, sellers need to be proactive, flexible and strategic to navigate the market effectively. 

Which is why, selling to a cash buyer can be especially advantageous. Cash house buyers (like ourselves) off a quick route to sale, no matter the condition of the housing market. We have our own cash reserves on hand ready to buy your property in as little as seven days, meaning we aren’t waiting on mortgage or lending approval.

What does a sellers market look like?

A sellers market is often characterised by conditions that favour sellers over buyers. In a sellers market, there is a lower inventory of homes for sale relative to the number of buyers, leading to increased competition for available properties. 

This often results in higher home prices, as buyers are willing to pay more to secure a property in a competitive market. 

Homes tend to sell quickly, and it's common for sellers to receive multiple offers, sometimes even above the asking price. Buyers may find themselves in bidding wars, needing to make quick decisions and often having to agree to more favourable terms for the seller.

A sellers market will place sellers in a strong position, with the ability to command higher prices and dictate terms, making it an optimal time for homeowners to sell their properties. 

Why do seller's markets occur?

The market dynamics in a sellers market are usually driven by strong demand, which can be influenced by factors like a robust economy, low mortgage rates and demographic trends. This imbalance of a robust economy and demand exceeding supply, bolsters consumer confidence and increases the number of potential buyers in the market.

Low mortgage rates can further fuel this demand, making home buying more accessible and attractive. Additionally population growth or shifts towards desirable areas, can intensify competition for homes in specific areas. 

What can buyers in a sellers market do?

Buyers in a sellers market will need to have a clear understanding of the essential requirements and potential areas for compromise, as finding the perfect home without any concessions is less likely in a sellers market. 

Being prepared to act quickly is also vital; prompt scheduling of viewings and making offers swiftly on suitable properties can make the difference in a market where properties often receive multiple bids. 

Offering a fair price is key. While everyone aims for a good deal, excessively low offers are more likely to be rejected outright in a sellers market, where sellers might have the luxury of choosing from several interested parties. 

Building a good rapport with the sellers can be beneficial; if the opportunity arises, being personable and friendly during viewings can positively influence sellers, as personal impressions often play a role in their decision-making process.

Despite the need for prompt action, patience remains an important virtue. Rushing into a purchase out of fear of missing out can lead to long-term regret or buyers remorse. It’s better to wait for a property that needs the most key criteria than to make a hasty decision that doesn’t align with long-term goals. 

Balancing urgency with patience, being prepared for compromises and maintaining a fair and personable approach can greatly aid buyers in successfully navigating a sellers market.

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Is 2024 going to be a buyers market or a sellers market?

We asked our team members across the business about their thoughts on whether 2024 will be a buyers market or a sellers market. In return, they have provided insights which collectively suggest a balanced market in 2024, where opportunities and challenges coexist for both buyers and sellers, potentially leading to a more equitable and balanced housing market. 

Kim, our Sales Progression Manager, anticipates a continued, albeit slow, decline in house prices for 2024. She suggests that interest rates will remain relatively stable with only a slight decrease, especially in the first half of the year.

However, with the cost of living stabilising, she believes that confidence among buyers and sellers might increase, potentially leading to market improvements in the latter half of the year. 

Nick, our Head of Valuations, observes that house prices in 2023 were more resilient than expected. He agrees with the notion of a decline in prices during the early part of 2024 but is optimistic about a potential increase in house prices in the latter half as interest rates begin to decrease. 

Karl, one of our Founder’s and CEO’s, shares a more stable outlook for the market in 2024. He foresees a gradual reduction in interest rates, potentially reaching between 4.50 to 4.75% by year-end. He believes this will bolster demand, especially from renters transitioning back into the market. 

Raphael, our Property Consultant Team Leader, predicts that high mortgage rates and the ongoing cost of living crisis will likely prevent any significant increase in housing prices in 2024. He also notes a trend towards more realistic asking prices, as evidenced by offers coming in below valuation and an increase in price reductions. 

Adam, our Commercial Director, expresses surprise at the resilience of the UK economy and property market, despite signs pointing towards a recession.

He highlights that many UK properties are unencumbered, meaning that not all homeowners are affected by changing interest rates. Additionally, he notes that lenders are increasingly accommodating, offering flexible terms to assist those facing financial difficulties. 

Together, these insights paint a picture of cautious optimism for the 2024 housing market. The expectation of stabilising or slightly decreasing interest rates, coupled with a resilient economy, suggests that the market might lean towards recovery, albeit at a gradual pace. This could mean a balance between a buyers market and a sellers market.

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Tom Condon

Tom Condon, one of our content writers, has fascinating expertise in sustainability in the property industry. Tom thoroughly understands the market and has experience in both residential and commercial property. He enjoys attending conferences and staying current with the most recent property trends.