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The UK real estate market continued its steady growth in 2023, and the outlook for 2024 is anticipated.
The UK real estate market continued its steady growth in 2023, and the outlook for 2024 is anticipated. London
By   Internet
  • City News
  • UK property market
  • mortgages
  • first time buyers
  • property trends
Abstract: First-time homebuyers are expected to be the largest group of home purchasers in 2024. Rapid rental growth is stimulating demand, prompting buyers to seek properties in more distant areas for better value. The growth trend from the last quarter of 2023 is expected to continue into early 2024. The real estate market is projected to maintain stable growth, although house prices may decline by 2%. Sales volume is expected to reach one million units.

According to the latest data, the UK real estate market maintained its growth trend in the fourth quarter of 2023. Zoopla's data indicates a 17% increase in new sales agreements and a 19% growth in home purchase demand compared to a year ago. This growth is attributed to an increase in people's income, a preliminary decrease in mortgage interest rates, and increased supply, providing buyers with more choices and positively impacting sales.


The UK House Price Index data shows that the annual rate of price decline in November 2023 slowed to -1.1%, compared to a +7.2% decline a year ago. This indicates a general slowdown in the rate of house price decline across regions and countries in the UK.


Zoopla's UK House Price Index, based on the largest dataset in the UK, consistent with the ONS House Price Index, includes both cash and mortgage sales. Cash purchases are expected to constitute one-third of total sales by 2023, becoming a significant pricing reference.


Cash purchases have an average price lower than mortgage purchases, being 10% less than mortgage sale prices. The rise in mortgage interest rates has impacted demand, so mortgage sales are expected to decline in 2023.

The UK real estate market continued its steady growth in 2023, and the outlook for 2024 is anticipated.

Zoopla's data shows that in the fourth quarter of 2022 and the first half of 2023, the rise in mortgage interest rates led to significant price declines. However, in recent months, with market stability, the recorded annual house price growth rate has improved.


Although mortgage interest rates have started to decline, affordability regulations remain a significant factor that makes it unlikely for house prices to rise in 2024, even as benchmark rates begin to decrease later this year. First-time homebuyers are expected to be the largest group of home purchasers in 2024, despite facing affordability challenges.


The latest consumer survey on household home-buying intentions indicates that 40% of those seeking to purchase homes in the next two years are first-time homebuyers. The rapid increase in rents continues to stimulate demand for this group, although they require higher deposit levels. Over the past three years, the average rent increase rate has exceeded the average mortgage repayment rate.


A major trend in 2024 will be homebuyers continuing to look to more distant areas for better value. Data shows that nearly half of potential movers residing in the southern region hope to move more than 10 miles away. This is crucial for homebuilders and real estate agents who need to pay attention to demand from more distant areas while maintaining the local market.


The stable growth trend formed in the last quarter of 2023 is expected to continue into early 2024, accompanied by a seasonal demand rebound in the first quarter. Although mortgage interest rates have decreased, affordability remains a significant challenge for households relying on mortgages when making housing relocation decisions.

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The UK real estate market continued its steady growth in 2023, and the outlook for 2024 is anticipated.
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