Despite gloomy predictions, UK house prices have held steady in the first six weeks of 2024.
There are many indicators that the housing market is more resilient than expected. Even as the UK economy officially slides into recession, metrics including buyer demand, new instructions and total sales show signs of new growth for property.
UK House Prices rise for the first time in six months
At the end of last year, we reported on the predictions of Lloyd’s Banking Group that UK house prices would continue to fall until 2025. In total, the Group predicted a fall in average prices by 2.4% across 2024.
In December 2023, UK house prices had dropped 1.4% in the previous 12-month period. The average new home was selling for £4,000 than the same property in December 2022. These figures led to gloomy predictions for the future of the housing market, but the first signs of recovery were already appearing.
January saw a rise in house prices, although still slightly below averages for last January. Lender Halifax reported the 1.4% rise was the fourth consecutive month of gains.
February has subsequently seen the first YoY rise in house prices for six months. According to Rightmove’s price index, prices for new listings in February are up 0.9% on January and 0.1% on February of last year, the first annual price increase since August 2023.
Buyer demand is also high
New property sales are up 16% based on YoY figures showing a market that is beginning to bounce back. Based on current trends, analysts are projecting around 1.1m sales will be completed in 2024, an overall growth of around 10% compared to 2023.
Similarly, Zoopla has reported buyer demand is up 11% compared to the same time last year. The increased demand is likely due to both the increased availability of lower-rate mortgages after the extreme inflation of 2023 and the increased availability of property. As well as rising demand, estate agents have also reported a 25% increase in new instructions compared to January last year.
Prime UK house prices fail to meet expectations
Predictions about the Prime housing market have also not proven true at the start of the year. The Prime property market, referring to properties valued at £5 million and above, was expected to be robust throughout the year, potentially propping up a weaker general market.
In practice, the opposite appears to be true. Prime property transactions were down 15.5% in January compared to the same period last year and 6.9% below the pre-pandemic January average. Sales values as well as volume have fallen. In London, the average Prime property sale value fell 7.1%, the largest fall in five years according to an analysis by LonRes. At a time when the broader domestic market is unexpectedly strong, the Prime market is failing to perform as analysts expected.
