What will happen to house prices in 2024?
IF you're looking to get on the property ladder, you'll be keen to know what's happening with house prices.
It's impossible to predict what will happen to property costs, but some factors can indicate whether they might go up or down.
The cost of taking out a mortgage can have a big impact, with higher interest rates making it more expensive to own a home.
This can pull house prices down as buyers are less inclined to spend their money.
Mortgage rates tend to echo the Bank of England's (BoE) base rate, influencing how much interest banks charge on loans or pay out for savings.
The current rate remains at 5.25%, meaning mortgage rates are still substantially higher than they were three years ago.
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Job security is another major factor contributing to house prices.
If there's concern that big companies could start making redundancies, people tend not to make big financial commitments.
That leaves fewer people looking to buy homes, leaving sellers with fewer offers on their properties.
This is known as a buyer's market because if sellers need to move, they can be forced to accept a lower price.
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If that starts happening everywhere - average house prices start to come down.
Below, we take a look at what could happen to house prices over the course of the year.
Who tracks house prices?
There are several different house price trackers, all of which measure something slightly different.
The official measure comes from the Office for National Statistics, which examines the prices homes have actually sold for after they are registered on the Land Register.
This is the most accurate of all the indices, but the figures come out three months after the homes are sold, so there's a big time lag.
Rightmove, Halifax, and Nationwide all publish a monthly index tracking the average prices of homes on which they provide mortgages.
While they do adjust their figures to iron out big outliers, both lenders measure average house prices based on the properties they see.
What help is out there for first-time buyers?
GETTING on the property ladder can feel like a daunting task but there are schemes out there to help first-time buyers have their own home.
Help to Buy Isa - It's a tax-free savings account where for every £200 you save, the Government will add an extra £50. But there's a maximum limit of £3,000 which is paid to your solicitor when you move. These accounts have now closed to new applicants but those who already hold one have until November 2029 to use it.
Help to Buy equity loan - The Government will lend you up to 20% of the home's value - or 40% in London - after you've put down a 5% deposit. The loan is on top of a normal mortgage but it can only be used to buy a new build property.
Lifetime Isa - This is another Government scheme that gives anyone aged 18 to 39 the chance to save tax-free and get a bonus of up to £32,000 towards their first home. You can save up to £4,000 a year and the Government will add 25% on top.
Shared ownership - Co-owning with a housing association means you can buy a part of the property and pay rent on the remaining amount. You can buy anything from 25% to 75% of the property but you're restricted to specific ones.
Mortgage guarantee scheme - The scheme opens to new 95% mortgages from April 19 2021. Applicants can buy their first home with a 5% deposit, it's eligible for homes up to £600,000.
What is the average house price now?
The average UK house price fell by 0.2% month on month in March, although there are signs that activity is picking up, according to Nationwide's latest index.
Property values increased by 1.6% annually, taking the average UK house price to £261,142.
Robert Gardner, Nationwide’s chief economist, said: "Activity has picked up from the weak levels prevailing towards the end of 2023 but remains relatively subdued by historic standards.
"For example, the number of mortgages approved for house purchase in January was around 15% below pre-pandemic levels.
"This largely reflects the impact of higher interest rates on affordability.
"While mortgage rates are below the peaks seen in mid-2023, they remain well above the lows prevailing in the wake of the pandemic."
Of course, it's worth bearing in mind that this is just one index, and the results can be different depending on the website or lender.
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Will house prices go down in 2024?
It's impossible to predict what will happen to house prices in 2024 as there are so many factors involved.
But Rob Wood, chief UK economist at Pantheon Macroeconomics, says: "Forward-looking indicators continue to suggest house prices will keep rising as mortgage rates gradually tick down.
"We continue to expect house prices to rise 4% year over year in 2024."
Nick Mendes, technical manager at John Charcol mortgage advisers, said sellers will still need to price competitively.
He added: "Mortgage rates have steadily reduced, first-time buyers and home movers are now re-engaging with the market.
"Those who held back due to previous concerns now see it as the perfect time to make the move.
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"But it is important to stress, though, that we are seeing two types of sellers - those that are pricing their property competitively in line with market conditions and those that are still holding out for the highs of 2022.
"It's important for sellers to be price sensitive but not to put off potential buyers."
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