Increased Home Availability and Stable Prices - 2024's Housing Market Update:

As 2024 unfolds, homebuyers find themselves with an expanded selection of properties, thanks to a 20% increase in homes hitting the market. This surge in listings is accompanied by an anticipation that mortgage rates will stabilise, hovering between 4% to 5%.

This abundance of available properties is a breath of fresh air for potential buyers, offering them a much wider array of choices. While house prices show signs of steadiness, with reductions becoming less frequent than the previous year, they continue to decelerate in their decline. The current annual house price inflation modestly sits at -0.5%, showing a slight improvement from the -1.4% dip observed in October 2023.

The most significant price adjustments are noted in the UK’s pricier regions, namely the South East and East of England, where reductions of 5% or more are not uncommon. Conversely, other parts of England, along with Wales, Scotland, and Northern Ireland, are witnessing modest price appreciations, with Northern Ireland leading the pack with a 4.3% increase over the past year.

Looking into the crystal ball of mortgage rates for 2024, while there's a minor retreat to the figures seen a year prior, rates above 4% are likely to remain constant throughout the year. This stabilisation is critical for invigorating housing market activity.

The UK housing market currently exhibits a three-tiered structure, heavily influenced by regional affordability and the prevailing economic conditions. Southern England is experiencing the most pronounced price dips, attributed to higher mortgage rates and the squeeze on household finances. London, despite its high property values, is witnessing a tempered inflation rate due to gradually improving affordability, making it an increasingly attractive market for buyers. Meanwhile, the rest of the UK, particularly regions with more accessible housing prices, is observing more resilient pricing dynamics.

As for the upcoming Budget, it's unlikely to introduce immediate stimulants to the housing market, although there's room for permanent adjustments to the stamp duty relief for first-time buyers established in the autumn of 2022. While the potential introduction of schemes like the Mortgage Guarantee Scheme could influence the market, their impact would be gradual, dependent on the breadth of these initiatives.

Written by Veera Josey, 13th March 2024