Rightmove, the biggest property portal in the UK, has predicted a decline in house prices next year.
According to Rightmove's projections, average new seller asking prices are expected to be 1% lower nationwide by the close of 2024.
Highlighting the need for sellers to adopt more competitive pricing strategies to attract buyers in 2024, Rightmove also foresees continued challenges in first-time buyer affordability, stating that it will "remain stretched".
Current market trends
Comparing the current market to predictions made a year ago, Rightmove initially forecasted a 2% drop in average new seller asking prices for 2023. The portal's most recent data reveals a 1.3% decrease year-on-year.
The property market has been navigating various challenges throughout 2023, including economic uncertainties and shifting buyer dynamics.
The latest forecast indicates a cautious outlook for the housing market in the coming year, suggesting that both sellers and first-time buyers may face a more demanding environment.
As the landscape evolves, Rightmove advises sellers to be mindful of pricing strategies to enhance their chances of securing buyers in 2024.
Rightmove property expert, Tim Bannister, said:
"This year has been better than many predicted, with no significant signs of forced sellers, lower than expected price falls, and good buyer demand for the right-priced quality properties.
"An average drop of 1% in prices reflects our prediction that it's likely to be another muted, and in parts challenging, year for some buyers and sellers in 2024."
Interest rates and the mortgage market
Despite the Bank of England pausing its run of base rate increases and current predictions that the mortgage market will be more stable in 2024, mortgage rates will likely remain high next year.
Rachel Springall, a finance expert at Moneyfacts, stated that the past two years of continuous interest rate hikes have led to an "unprecedented period of interest rate volatility" for mortgages. She continued:
"Those coming off a fixed rate deal and wishing to fix once more will likely have to cover a much higher mortgage repayment, with the average two-year fixed rate more than double what it was in December 2021."
In light of the current market conditions, Bannister advised that sellers should still price properties "more aggressively" than their competition to alleviate pressure on buyer affordability. However, a mixed picture across Great Britain highlights the importance of pricing in line with local market trends.
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